COVER PAGE
[GRAPHIC: Four-color photo of various kinds of globes and investment statistics]
U.S. GLOBAL INVESTORS FUNDS
SEMI-ANNUAL REPORT
DECEMBER 31, 1997
[GRAPHIC: U.S. Global Investors Logo]
<PAGE>
U.S. GLOBAL INVESTORS FUNDS
SEMI-ANNUAL REPORT
(Unaudited)
December 31, 1997
TABLE OF CONTENTS
Letter to Shareholders ............................ 1
Fund Manager's Perspective ........................ 3
Portfolios of Investments ......................... 27
Notes to Portfolio of Investments ................. 63
Statements of Assets and Liabilities .............. 68
Statements of Operations .......................... 72
Statements of Changes of Net Assets ............... 76
Notes to Financial Statements ..................... 84
Financial Highlights .............................. 91
<PAGE>
[GRAPHIC: Photograph of Frank Holmes]
Dear Shareholder,
The past six months have challenged the patience of investors in gold equities
and Asian stocks. A strong U.S. dollar, surging domestic equity markets, low
inflation and a series of central bank sales have contributed to the lowest gold
prices in eighteen years. According to Lipper Analytical Services, not a single
gold fund posted positive returns for '97.
China and Hong Kong suffered heavily from declines related to Asia's currency
crisis and negative investor sentiment, resulting in less than stellar returns
for our China Region Opportunity Fund. The fundamentals for China remain sound,
however. The Chinese market should rebound in the wake of progressive policy
moves by the Chinese government in their advance toward a free market economy.
I expect gold will find a bottom in the first half of this coming year. By then
consolidations in the industry and strong demand in Asia (as they turn to gold
as a solid alternative to paper currency) should have the price rising again. As
always, I caution you to allocate no more than 5-10% of your assets in gold
equities and 3-5% in emerging markets such as China. Consider using the ABC
Plan(R) to average the cost of your investments.
While the impact of Asia's problems on the domestic equity market remains to be
seen, for the short term it has removed investor concern that the Federal
Reserve would raise interest rates. I expect we will see reduced earnings
projections for American companies operating in Asian markets. Your fund
managers will keep a vigilant eye on developments in Asia and around the world.
The situation in Asia and in gold equities has created terrific buying
opportunities for the long term investor. Remember that following sound
principles of smart investing is more important than picking any one "right"
stock or fund.
1) SET YOUR GOALS. Then decide on a long term strategy for achieving them. Stick
to your plan. Documented studies have shown, time is your ally. The power of
compounding can make the numbers really add up over time.
2) ALLOCATE YOUR ASSETS WISELY. With our family of funds you can diversify
across many industry and geographical sectors, from blue chips to gold mines,
from Wall Street to Russia, while reducing the overall risk and volatility in
your portfolio.
1
<PAGE>
3) DON'T TRY TO TIME THE MARKET. Build your position in a fund gradually by
investing on a regular basis. You can achieve this automatically when you enroll
in the ABC Investment Plan(R). And don't let
short-term market corrections take your eye off your long-term investment plans.
The past six months have brought dynamic change to U.S. Global Investors. We are
implementing several new products and services to serve your financial needs
better and faster. All of our shareholders will benefit from our upgrade to DST
technology for our transfer agency and record keeping functions. With just a
couple of keystrokes our shareholder service representatives will have instant
access to all of your account records and communications, enabling them to solve
your problems and answer your questions with just one phone call. Those of you
who are U.S. Treasury Securities Cash Fund shareholders will benefit from the
added convenience of an ATM/check card on your account.
Immediately following my letter you'll find a concise analysis of the factors
which affected your fund's performance over the past six-months. Also included
are top fund holdings and fund diversification diagrams. Following that synopsis
you'll find a more detailed report on fund performance and portfolio holdings.
Financial reports can be daunting to the novice and seasoned investor alike, so
if you have any questions about the facts and figures contained within these
pages, don't hesitate to call our Shareholder Education and Service Center at
1-800-US-FUNDS (1-800-873-8637).
Wishing You Success in the New Year.
/s/ Frank Holmes
Frank Holmes
President & CEO
U.S. Global Investors
................................................................................
For more complete information, including charges and expenses, please call
1-800-US-FUNDS for a free prospectus. Read the prospectus carefully before you
invest or send money. It details the risks of investing in emerging markets.
2
<PAGE>
- --------------------------------------------------------------------------------
FUND MANAGER'S PERSPECTIVE U.S. GLOBAL MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
INTRODUCTION
U.S. GOVERNMENT SECURITIES SAVINGS
----------------------------------------------------------------------
5.37% 5.51%
7-day Simple Yield 60 days to Maturity 7-day Effective Yield
as of December 31, 1997 as of December 31, 1997
----------------------------------------------------------------------
U.S. TREASURY SECURITIES CASH
----------------------------------------------------------------------
4.47% 4.57%
7-day Simple Yield 70 days to Maturity 7-day Effective Yield
as of December 31, 1997 as of December 31, 1997
----------------------------------------------------------------------
The U.S. Government Securities Savings Fund seeks to preserve capital and
generate income by investing exclusively in short-term securities backed by the
United States government or its agencies. Typically, these government agency
securities carry a higher yield than United States Treasury Securities.
The U.S. Treasury Securities Cash Fund invests short term in U.S. Treasury
Securities which are protected by the "full faith and credit" of the United
States government, and repurchase agreements backed by U.S. Treasury Securities,
which are short-term borrowings collateralized by treasury securities.
PERFORMANCE
The U.S. Government Securities Savings Fund continued to be ranked in the top
ten in the government-only money market fund category as ranked by both IBC Data
and Lipper Analytical Services. The U.S. Treasury Securities Cash Fund remained
in the bottom quintile in terms of overall return as ranked by Lipper Analytical
Services. What is not measured is the excellent value provided by the U.S.
Treasury Securities Cash Fund in terms of free unlimited checkwriting and timely
statements rivaling a full service commercial bank checking account (The Fund is
not a bank, nor is it backed by FDIC insurance). On top of these benefits, the
shareholder receives a daily dividend as much as 3.00% higher than that offered
by most banks. The U.S. Treasury Securities Cash Fund will add the option of a
ATM/check card in the first quarter of 1998.
3
<PAGE>
- --------------------------------------------------------------------------------
U.S. GLOBAL MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
SIX MONTHS IN REVIEW
The stock market tumbled in October in a ten-year anniversary performance, and
yet within the next month it had regained all it had lost. Interest rates
appeared to be headed higher after UPS workers negotiated higher wages and Mr.
Greenspan commented that "the economy has been on an unsustainable track." Yet
by year end the Asian currency crisis and the low CPI and PPI numbers seemed to
have put any Fed policy move on hold for a while. The unemployment rate dropped
to the lowest level in twenty-five years.
These signals would have spelled out a strong case for a tightening move in the
future, were it not for the Asian problems. We followed the daily increases in
the bailout of Korea offered by the IMF with interest, mainly because we
expected that it would eventually spill over into the other Asian economies. By
December we saw that one-month LIBOR was quoted above 6.00%, due to the fact
that two large Japanese banks involved in setting the rate were beginning to
feel the "Asian Flu."
As we approached the holidays, Christmas sales were slow and retailers had to
reduce prices and increase advertising to get the consumer to buy. This did help
a little toward the end of the year, as sales picked up slightly. Also helping
the consumer was the thirty-year bond as it rallied, leaving the rate on a
thirty-year mortgage hovering near or even below seven percent. We looked ahead
to the prospect of a pick up in refinancings and higher profits for the housing
industry.
INVESTMENT HIGHLIGHTS
In the U.S. Treasury Securities Cash Fund, we took on some new coupon positions
in the four to six month area of the curve. The repurchase agreement portion of
the portfolio helped to balance out the new purchases. We are beginning to add
more features to this fund, such as the ATM/check card, and expect to increase
its size in the future.
In the U.S. Government Securities Savings Fund, we concentrated on buying
shorter maturities due to the flat yield curve, which reduced our weighted
average maturity to around sixty days for year end. The Treasury bill curve
remained quite flat, keeping our extension buys at a minimum.
4
<PAGE>
- --------------------------------------------------------------------------------
U.S. GLOBAL MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
OUTLOOK
The Federal Reserve did not take any action at its November and December
meetings and we do not expect them to take any action at the February meeting.
We will be watching closely the employment cost index, the December employment
report, and the fourth quarter GDP number. These numbers could force a
twenty-five basis point increase in interest rates by year-end 1998, if strong
enough. The Fed would much prefer to remain on hold and allow the markets to
adjust themselves.
We will continue to look for longer fixed-rate paper at a reasonable price in an
effort to extend our weighted average maturity out to the seventy day range.
Economists will start to disagree on the direction of the next Fed move due to
the differing domestic and foreign economic problems. The long bond is again at
an historical low yield, and even though the yield curve is quite flat this
time, it does cause us to remain cautious.
5
<PAGE>
- --------------------------------------------------------------------------------
FUND MANAGER'S PERSPECTIVE TAX FREE FUNDS
- --------------------------------------------------------------------------------
INTRODUCTION
The Funds invest in securities with relatively short maturities. The Near-Term
Tax Free Fund attempts to maintain an average weighted portfolio maturity of
five years or less. The Funds seek to preserve capital and provide income which
is exempt from federal income tax.
PERFORMANCE
During the quarter both of our tax free funds rose in price, reflecting the
improving interest rate outlook. Assets in the Near-Term Tax Free Fund decreased
slightly. The Tax Free Fund, on the other hand, showed an increase in assets of
over one million dollars. Its NAV rose sixteen cents, while its yield fell
slightly.
SIX MONTHS IN REVIEW
Municipal supply picked up as we moved into the fourth quarter and out of the
summer doldrums. The rally in bond yields made a number of refundings
profitable. Supply in the first part of the fourth quarter was up over six
billion in one week alone. Demand for the new issues came mostly from
institutional buyers, principally insurance companies, arbitragers and mutual
funds.
INVESTMENT HIGHLIGHTS
NEAR TERM TAX FREE FUND
TOP 5 SECTORS-
BASED ON TOTAL INVESTMENTS
12.62%................................School/Education
44.99%................................General Improvements
7.67%.................................Pollution
22.04%................................Water & Power
12.69%................................Hospital / Healthcare
6
<PAGE>
- --------------------------------------------------------------------------------
TAX FREE FUNDS
- --------------------------------------------------------------------------------
During the period, we selectively traded our positions in both tax free funds.
In the Near-Term Tax Free Fund we extended our weighted average maturity by
purchasing longer callable issues. These issues will help to bolster our yield
while remaining less volatile during the market's gyrations. In the Tax Free
Fund we took positions in longer zero coupon bonds while selling off some of our
high coupon callable issues.
TAX FREE FUND
TOP 5 SECTORS-
BASED ON TOTAL INVESTMENTS
17.30%....................................Hospital/Healthcare
30.97%....................................School/Education
10.05%....................................Housing
18.56%....................................General Improvements
18.00%....................................Water & Power
7
<PAGE>
- --------------------------------------------------------------------------------
TAX FREE FUNDS
- --------------------------------------------------------------------------------
NEAR TERM TAX FREE
BOND RATINGS -
BASED ON TOTAL INVESTMENTS
[Graphic: Pie chart plotted from data in table below]
2.42%.....................................Cash Equivalents
9.87%.....................................BBB/Baa
15.28%....................................AA/Aa
30.29%....................................A/A
42.14%....................................AAA/Aaa
TAX FREE
BOND RATINGS -
BASED PM TOTAL INVESTMENTS
[Graphic: Pie chart plotted from data in table below]
1.98%.....................................BBB/Baa
6.37%.....................................Cash Equivalents
10.13%....................................AA/Aa
27.15%....................................A/A
54.37%....................................AAA/Aaa
CURRENT OUTLOOK
The crisis in Asia will keep the Fed on hold in terms of interest rates. Since
the outlook for inflation appears to be benign, we have adopted a cautionary
stance on the prospect of another Fed rate increase. Although at present it does
not appear likely, we fully expect that future economic releases will show a
solid economy with moderate growth. Look for the fourth quarter GDP number to be
higher than expected.
8
<PAGE>
- --------------------------------------------------------------------------------
FUND MANAGER'S PERSPECTIVE INCOME FUND
- --------------------------------------------------------------------------------
INTRODUCTION
The Fund invests in a broad range of equity and debt securities, at least 80% of
which are income producing securities. The Fund focuses on issuers that have an
established record of paying cash dividends, including companies that provide
essentials such as electricity, gas and telephone services.
PERFORMANCE
For the quarter ended September 30, 1997, the Income Fund returned 5.76%,
compared to an average gain of 5.55% for its peers according to Lipper
Analytical Services. In this same quarter, the Income Fund exceeded the S&P
Utilities Index because its non-utilities holdings performed better than its
utilities holdings. In the fourth quarter, this situation was reversed, with
utilities out-performing non-utilities. During this quarter the Fund returned
6.13%, while the average return for funds in its peer group was 10.62% according
to Lipper Analytical Services.
SIX MONTHS IN REVIEW
The third quarter saw greater return on non-utilities, while the fourth quarter
was characterized by strong performance in the utility sector. With interest
rates declining in the market place, investors looked for consistent yield and,
therefore, turned to utility stocks. The sector also saw prices increase as a
result of the impending deregulation that had investors expecting mergers.
The energy sector did well initially in the fourth quarter, and then faltered as
energy prices came down due to raised OPEC production quotas, UN approved oil
sales from Iraq for humanitarian reasons, a mild winter to date, and
expectations that demand in Asia will decline. Natural gas performed well
because it is at the end of its deregulation cycle. Telecommunications did well
as investors turned away from the troubled technology sector.
INVESTMENT HIGHLIGHTS
The Fund out-performed the utility average in the third quarter and
under-performed in the fourth. Unfortunately, in the fourth quarter we were
over-weighted in non-utilities such as energy and real estate investments.
Diversification into other sectors than utilities hurt the Fund's performance
this half year as the utilities sector performed quite well. We continued to
invest in preferred stocks and corporate bonds with higher yields.
9
<PAGE>
- --------------------------------------------------------------------------------
INCOME FUND
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS BASED ON TOTAL INVESTMENTS
Duke Energy Corp...........................5.30%
Electric Services
Lucent Technologies, Inc...................2.34%
Telecommunications
Bell Atlantic Corp.........................2.25%
Telecommunications
U.S. West Communications Group.............2.10%
Telecommunications
AT&T Corp..................................2.00%
Telecommunications
Lyondell Petrochemical Co..................1.96%
Petrochemical & Coal Products
American Electric Power, Inc...............1.92%
Electric Services
New Jersey Resources Corp..................1.87%
Natural Gas Transmission & Distribution
Sierra Pacific Resources...................1.75%
Electric Services
Ashanti Capital............................1.74%
Gold & Silver Mining
Other.....................................76.77%
TOP 5 INDUSTRIES -
BASED ON TOTAL INVESTMENTS
7.73% .............Natural Gas Transmission
23.34% .............Electric Services
4.36% .............Petroleum Refining
21.53% .............Telecommunications
10.94% .............Real Estate Investments Trusts
10
<PAGE>
- --------------------------------------------------------------------------------
INCOME FUND
- --------------------------------------------------------------------------------
CURRENT OUTLOOK
Historically, utility stocks do well in a falling interest rate environment.
With interest rates at 30-year lows, it appears that there is not much room for
increasing returns in utilities. In addition, California's deregulation of the
utilities on January 1 will put pressure on profit margins in the utilities
industry. This implies that our weighting in sectors outside the utility
industry will prove advantageous in the coming quarters. We plan to reduce our
exposure to energy stocks, as fundamental factors indicate that oil prices will
not be rising in the near future. The new management team of Creston King and
Michael Chapman, who took over management of the Fund in mid-December, plan to
deploy assets into fixed income vehicles to provide higher dividend income to
shareholders. The focus will be on high-yielding securities that fundamental
analysis indicates are undervalued, convertible and preferred securities.
11
<PAGE>
- -------------------------------------------------------------------------------
FUND MANAGER'S PERSPECTIVE ALL AMERICAN EQUITY FUND
- -------------------------------------------------------------------------------
INTRODUCTION
The Fund's portfolio is primarily invested in American large-cap stocks, with a
minor component of stocks with pure growth potential. The Fund's objective is to
outperform the stock market average by maintaining diversification similar to
the S&P 500, while having the flexibility to seek out promising individual stock
opportunities.
PERFORMANCE
The Fund returned 5.27% in the third quarter compared to an average return of
9.04% for its peer group, according to Lipper Analytical Services. The Fund had
lower returns due to the under- performance of several of our top holdings and
our large cash position. In the fourth quarter, the Fund returned 2.36% compared
to an average return of .79% for its peer group, according to Lipper Analytical
Services.
SIX MONTHS IN REVIEW
The U.S. market remained in an uptrend as the interest rate continued to be
favorable and corporate earnings continued to deliver, despite fears about
Asia's economic turmoil. As Asia's problems continued to unfold, the Dow Jones
fell nearly 10%, or more than 800 points, in the last week of October. In a show
of unparalleled resilience, the market had recovered most of the losses by early
December. Blue chips continued their upward movement as the interest rate
environment remained favorable and corporate earnings growth continued. More
money flowed into large-cap stocks than mid- or small-cap stocks because of the
blue chips' perceived ability to remain strong in uncertain environments.
12
<PAGE>
- -------------------------------------------------------------------------------
INVESTMENT HIGHLIGHTS ALL AMERICAN EQUITY FUND
- -------------------------------------------------------------------------------
All holdings did well with the exception of large-cap technology stocks such as
Intel and Microsoft. Our reduction in technology stocks in the third quarter
proved to be on the mark. Semi-conductor stocks experienced a big correction and
were among the worst performing stocks during the quarter. We sold our positions
in several semi-conductor stocks, such as Texas Instruments, as we felt they
were overvalued and there were too many momentum investors in the stocks. We
sold Texas Instruments for $72 and it was recently changing hands at $44. Best
Buy skyrocketed more than 50% in the fourth quarter and is up more than 200% for
the year. We held the stock for more than a year. After the recent run up, we
felt Best Buy was fairly valued and sold our position. We increased our
weighting in the financial sector based on the benign outlook for inflation. We
also increased our weightings in drug stocks.
------------------------------------------
TOP 10 HOLDINGS BASED ON TOTAL INVESTMENTS
------------------------------------------
General Electric Co.................3.37%
Household Appliances
Coca Cola Co........................3.11%
Beverages
Microsoft Corp......................2.60%
Data Processing & Software
Merck & Company, Inc................2.29%
Pharmaceuticals
Intel Corp..........................2.12%
Electronics & Components
IBM Corp............................2.10%
Computer & Office Equipment
Philip Morris, Inc..................1.98%
Tobacco
Johnson & Johnson Co................1.89%
Healthcare & Equipment
Pfizer, Inc.........................1.82%
Pharmaceuticals
Fannie Mae..........................1.74%
Financial Services
Other...............................76.98%
13
<PAGE>
- -------------------------------------------------------------------------------
ALL AMERICAN EQUITY FUND
- -------------------------------------------------------------------------------
TOP 5 INDUSTRIES -
BASED ON TOTAL INVESTMENTS
------------------------------------------------
Computer & Office Equipment ...............5.87%
Pharmaceuticals ..........................10.42%
Data Processing & Software ................5.07%
Financial Services ........................6.72%
Telecommunications ........................6.53%
CURRENT OUTLOOK
We believe that the currency crisis in Asia will cause inflation to stay low for
some time. Although the direct impact to the overall U.S. economy is limited, it
should not be underestimated. Problems in Asia will affect corporate earnings
for American blue chips in the latter part of 1998, especially in the technology
sector. We don't think the impact will be as severe as some analysts have
predicted, however. We predict growth in the U.S. economy will continue at a
reduced rate.
14
<PAGE>
- --------------------------------------------------------------------------------
FUND MANAGER'S PERSPECTIVE REAL ESTATE FUND
- --------------------------------------------------------------------------------
INTRODUCTION
The Fund's primary investment objective is long-term capital appreciation.
Current income is a secondary consideration. The Fund predominately invests in
companies which derive at least 50% of their revenues from the ownership,
construction, management or sale of residential, commercial or industrial real
estate. The real estate sector is a hybrid asset class which embodies
characteristics of both the equity and fixed income markets. Independent
research also indicates this asset class may be a good inflation hedge.
PERFORMANCE
During the third quarter of this year, the Dow Jones Industrial Average Index
rose only 4%. In contrast, real estate funds substantially out-performed the
market. The Fund returned 13.64% in the third quarter, as measured by Lipper
Analytical Services, while in the fourth quarter the Fund declined 0.45%. Real
estate funds on average were up 0.64% in the fourth quarter while the Dow Jones
Industrial Average Index was essentially flat at -0.02%.
SIX MONTHS IN REVIEW
Entering in the third quarter of 1997, investors had been favoring large-cap
stocks over small- and mid-cap issues. During the quarter, the performance gap
between these two sectors of the market narrowed in favor of the small- and
mid-cap stocks. On a relative valuation basis, large- cap stocks were not cheap.
Prudent investors looked for better value in other sectors of the market.
Probably the most important factors which held back real estate stocks in the
first half of 1997 were investors' concerns over the possibility of the Fed
raising interest rates, leading to a weaker economy and a continued supply of
new real estate offerings coming to the public market.
As expected, Real Estate Investment Trusts (REITs) participated in the global
equity sell-off in late October. However, REITs out-performed other market
indices by a wide margin. REITs pulled back about 3.6%, while other market
indexes like the S&P 500 fell 9.5% and the Dow Jones Industrial Average gave up
10.9%. One of the reasons that REITs performed so well could be attributed to
the attractive yields which REITs offer to investors. At the beginning of
November 1997, the average yield on an equally weighted basis was 6.43% for
REITs, while the yields on the S&P 500 and the Dow Jones Utility Average were
1.63% and 4.31%, respectively.
15
<PAGE>
- --------------------------------------------------------------------------------
REAL ESTATE FUND
- --------------------------------------------------------------------------------
INVESTMENT HIGHLIGHTS
Among the different property types, we still believe hotel and office REITs have
the best fundamentals. We have been favoring the upscale resort and destination
hotels. New hotel construction has taken place mainly in the low end or economy
class rooms. Robust economic growth has fostered huge demand for the upscale
rooms, many of which are booked months in advance. In the office sector, it has
been estimated that in the next 12 months about 69 million square feet of new
office space will be coming online, but demand is expected to be about 200
million square feet.
There is strong internal growth in this industry, as evidenced by a firm rise in
rental growth rates, by capital costs dropping in response to the solid
underlying fundamentals, and by the plentiful acquisition opportunities on the
horizon to achieve better economies of scale. We also continue to see evidence
that REITs, as an asset class, have gained widespread ownership by investors. A
recent survey reported that the aggregate market-weighted institutional
ownership of the REIT industry was 50%, with some individual companies posting
institutional levels of 75% and higher. We believe REITs, which are paying
attractive dividends and have solid growth prospects, constitute an attractive
place to wait out an uncertain environment.
------------------------------------------------------
TOP 10 HOLDINGS BASED ON TOTAL INVESTMENTS
------------------------------------------------------
Liberty Property Trust...........................3.34%
REIT (Diversified)
Bedford Property Investors, Inc..................3.28%
REIT (Warehouse/Industrial)
Bay Apartment Communities........................3.27%
REIT (Apartments)
Manufactured Home Communities....................3.16%
REIT (Manufactured Homes)
Sunstone Hotel Investors, Inc....................3.10%
REIT (Hotel/Restaurant)
First Industrial Realty..........................3.03%
REIT (Warehouse/Industrial)
Security Capital Pacific Trust...................2.99%
REIT (Apartments)
Catellus Development Corp........................3.03%
REIT (Real Estate Development)
Public Storage, Inc..............................2.94%
REIT (Storage)
Patriot American Hospitality, Inc................2.94%
REIT (Hotel/Restaurant)
Other...........................................68.91%
16
<PAGE>
- --------------------------------------------------------------------------------
REAL ESTATE FUND
- --------------------------------------------------------------------------------
------------------------------------------------------
TOP 5 INDUSTRIES -
BASED ON TOTAL INVESTMENTS
------------------------------------------------------
Diversified .....................................8.53%
Warehouse / Industrial .........................18.09%
Office Property .................................8.37%
Apartments .....................................15.92%
Hotel / Restaurant .............................14.79%
CURRENT OUTLOOK
In 1997, the REIT industry raised over $21 billion of equity, including close to
$4.5 billion in initial public offerings. The total equity raised easily exceeds
the $12.1 billion issued in 1996 and the previous high of $13.2 billion in 1993.
The securitization of private real estate into the public market has met with
overwhelming success. Private investors found that investors in the public
market value the management team in addition to the portfolio properties. The
market capitalization of REITs is approximately $125 billion, while estimates of
the dollar value of institutional quality commercial real estate in the U.S.
approaches $3 trillion. Obviously, not all of this real estate will be
securitized immediately, but it does provide a huge inventory of property from
which real estate companies can grow their business.
17
<PAGE>
- --------------------------------------------------------------------------------
FUND MANAGER'S PERSPECTIVE CHINA REGION OPPORTUNITY FUND
- --------------------------------------------------------------------------------
INTRODUCTION
The Fund invests in the stocks of companies of the People's Republic of China,
Hong Kong and neighboring countries.
PERFORMANCE
The total return for the China Region Opportunity Fund in the third quarter of
1997 was 2.56% compared to an average return of -3.33% for its peer group,
according to Lipper Analytical Services. The total return for the China Region
Opportunity Fund in the fourth quarter of 1997 was -33.71%, compared to an
average return of -30.02% for its peer group, according to Lipper Analytical
Services.
SIX MONTHS IN REVIEW
The Fund suffered one of its worst declines since its inception. The Hong Kong
and Chinese markets were greatly impacted by the currency turmoil in Asia. The
currency crisis, starting with Thailand, Malaysia and Indonesia, quickly spread
to neighboring but stronger economies such as Singapore, South Korea and Taiwan.
Interest rates on the Hong Kong dollar skyrocketed, resulting in a negative
impact on the real estate market and the economy in general. The Hong Kong
market declined severely. Chinese shares provided no safe harbor. Investor money
left Asia, further impacting prices.
------------------------------------------------------------------
TOP 10 HOLDINGS BASED ON TOTAL INVESTMENTS
------------------------------------------------------------------
HSBC Holdings Ltd........................................... 6.48%
Banking/Financial Services
Guangdong Kelon Electronics Holdings........................ 3.71%
Household Appliances
Citic Pacific Ltd........................................... 3.53%
Conglomerates
Shanghai Dazhong, Group B................................... 3.25%
Motor Vehicles & Transportation
China International Marine Container, Group B............... 2.89%
Water Transportation & Services
Li & Fung Ltd............................................... 2.57%
Apparel - Wholesale
Zhenhai Refining & Chemical Co. Ltd., Class H............... 2.38%
Petroleum Refining
Hutchinson Whampoa.......................................... 2.33%
Conglomerates
Qingling Motors Co. Ltd., Class H........................... 2.33%
Motor Vehicles & Transportation
NG Fung Hong Ltd............................................ 2.24%
Groceries - Wholesale
Other ......................................................68.29%
18
<PAGE>
- --------------------------------------------------------------------------------
CHINA REGION OPPORTUNITY FUND
- --------------------------------------------------------------------------------
INVESTMENT HIGHLIGHTS
Our exposure to Chinese stocks, once beneficial, was the major reason the Fund
under-performed its peer group at the end of the fourth quarter. Although we
were under-weighted in the real estate sector, we under-estimated the impact of
the currency turmoil and overstayed the party with the Hong Kong and Chinese
shares. Not part of the Hang Seng Index, Chinese shares were further impacted.
Although the economic reform in China is still progressing, investors were
dissatisfied with the pace of the market changes initiated by the Chinese
Government. As a result, despite solid economic fundamentals for China, Chinese
shares hit an historic low.
----------------------------------------------------
TOP 5 INDUSTRIES -
BASED ON TOTAL INVESTMENTS
----------------------------------------------------
Household Appliances ......................... 6.07%
Conglomerates ................................12.82%
Motor Vehicles & Transportation .............. 5.58%
Real Estate Developers ....................... 8.34%
Banking & Financial Services ................. 6.48%
CURRENT OUTLOOK
Although the declines were substantial, we see no reason to panic. A lot of
quality stocks were hammered to extremely attractive valuations. We believe the
Hong Kong and China markets will recover once the currency situation with other
countries stabilizes. We will keep adding quality stocks while eliminating
weaker ones. We have started adding real estate stocks because, even after an
assumed 50% drop in real estate prices, they will still trade at a discount to
their net asset values. We remain cautious in the short term, but very positive
for the long term. Our focus remains on the greater Chinese market.
19
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL RESOURCES FUND FUND MANAGER'S PERSPECTIVE
- --------------------------------------------------------------------------------
INTRODUCTION
The Fund is a diversified natural resource fund with the principal objective of
achieving long-term growth of capital, while providing protection against
inflation and monetary instability. The Fund invests in natural resource related
companies around the globe: small-, mid- and large- cap companies involved in
the production of metals, mineral, chemicals, energy and other resources.
PERFORMANCE
The period started well, with the Fund returning 24.56% for the third quarter
compared to an average gain of 14.90% for its peer group, according to Lipper
Analytical Services. The Fund finished the third quarter significantly above its
peers because of the Fund's holdings in the oil and gas service and exploration
sectors, and its holding in Brunswick Technologies, a specialty
chemical/industrial company. Further, mid- and small-cap companies generally
outperformed large-cap companies, and the Fund had a larger exposure to the
former. These weightings proved unfortunate in the fourth quarter when the oil
and gas service sector was hit hard by profit taking and fears that drilling
would slow down significantly. Our relative over-weighting in Canadian equities
and small to mid-cap issues also hurt in the fourth quarter, as large-caps were
essentially unchanged while small-cap issues shed almost 7% as measured by the
S&P 500 and the Russell 2000, respectively. Management's Discussions of Fund
Performance
SIX MONTHS IN REVIEW
While natural resource funds substantially out-performed the market in the third
quarter, in the fourth quarter economic turmoil in Asia caused investors to dump
many commodity-based securities or companies with international sales. As the
market began to digest the economic implications of each news story, investor
sentiment turned negative toward commodity-related investments. Coupled with
these events, OPEC announced that they would raise their production quotas.
Crude oil prices fell 13.6% for the fourth quarter. A milder than expected
winter in November and December led to a 30.7% decline in natural gas prices.
Copper and zinc prices retreated 18.8% and 32.8% for the quarter, respectively,
as the market factored in slower economic growth for the Asian economies.
20
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL RESOURCES FUND
- --------------------------------------------------------------------------------
INVESTMENT HIGHLIGHTS
The oil and gas service sector benefitted greatly in the third quarter from the
heavy bidding at the Gulf of Mexico lease auction. The culmination of these
events, however, was a sharp correction in natural resource equities. Our
exposure to zinc via Breakwater Resources contributed significantly to positive
third quarter returns. During the fourth quarter we established a large position
in Reserve Royalty Corporation, an oil and gas royalty company that creates
gross overriding royalties through direct investment and redeployment of assets
obtained through corporate acquisition. Since our initial purchase, Reserve
Royalty has gained 9.6%. We have also invested in Canadian Fracmaster, a
dominant player in the well fracturing business in Russia. As a result of
Canadian Fracmaster's work for equity program, they are now a strategic partner
with Russia's second largest oil company, A.O. Yukos Holding. Boris Yeltsin
recently removed a major restriction on the energy sector by signing a decree
that allows foreigners to own 100% stakes in Russian oil companies. As a result,
the sector should benefit from a healthy injection of capital.
------------------------------------------------------
TOP 10 HOLDINGS BASED ON TOTAL INVESTMENTS
------------------------------------------------------
Canadian Fracmaster Ltd..........................6.72%
Oil & Gas Field Services
Reserve Royalty..................................6.39%
Oil & Gas Extraction
Brunswick Technologies, Inc......................6.24%
Chemicals & Allied Products
Ensco International, Inc.........................4.44%
Oil & Gas Field Services
Renata Resources, Inc............................4.42%
Oil & Gas Extraction
The Pioneer Group, Inc...........................4.36%
Investment Advisors
Plains Energy Services Ltd.......................4.13%
Oil & Gas Field Services
Ensign Resource Service Group, Inc...............3.84%
Oil & Gas Field Services
Bonus Resources Services Corp....................3.64%
Oil & Gas Field Services
Pacalta Resources Ltd............................3.51%
Oil & Gas Extraction
Other...........................................52.31%
21
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL RESOURCES FUND
- --------------------------------------------------------------------------------
-----------------------------------------------------------
TOP 5 INDUSTRIES -
BASED ON TOTAL INVESTMENTS
-----------------------------------------------------------
5.57%...........................Transportation Services
34.27%...........................Oil & Gas Field Services
4.36%...........................Investment Advisors
31.96%...........................Oil & Gas Extraction
7.31%...........................Chemicals & Allied Products
CURRENT OUTLOOK
Investors are expecting lower oil prices due to the factors mentioned above.
There is also the distinct possibility that we may enter into a deflationary
environment with falling energy prices. Gold prices have tumbled to 18 year
lows. Oil prices are at 4.5 year lows. While the valuations for most of the
stocks in the natural resources sector have been beaten down significantly,
investor sentiment toward this asset class is still quite negative. Investments
in downstream or industrial sectors of the petroleum industry and chemical
sectors are more attractive at this time.
22
<PAGE>
- --------------------------------------------------------------------------------
U.S. GLOBAL GOLD FUNDS FUND MANAGER'S PERSPECTIVE
- --------------------------------------------------------------------------------
INTRODUCTION
The World Gold and Gold Shares Funds are committed to long term investments by
focusing on quality companies with seasoned management, growing reserves,
cost-efficient production and superior financial strengths. The World Gold Fund
will invest in exploration and junior mining companies, while the Gold Shares
Fund is focused on large-capitalization senior mining companies. The risk
profile of the Funds can be quite different. The success or failure of an
exploration or junior mining company's stock price is driven by their ability to
find new gold deposits and eventually establish a mine with an attractive growth
profile. The Gold Shares Fund can be more sensitive to changes in the price of
gold than the World Gold Fund.
PERFORMANCE
For the third quarter of 1997, the Gold Shares and World Gold Fund were up
slightly, 1.06% and 1.57%, respectively, according to Lipper Analytical
Services. The price of gold during the third quarter was essentially unchanged,
off only 0.73%. However, during the fourth quarter of 1997, the price of gold
tumbled about $45 per ounce. A drop of 13.56% in the price of gold caused a
sharp drop in the Funds' net asset values. The average return for gold equity
funds for the third and fourth quarters of 1997 were 1.33% and -30.26%,
respectively, as measured by Lipper Analytical Services.
SIX MONTHS IN REVIEW
No sector was spared in this bear market for gold. Gold prices reached
twelve-year lows in the third quarter of '97 on the announcement that the
Australian central bank had sold roughly two-thirds of its gold reserves.
Continuing central bank sales in the run up to the European Monetary Union and
the announcement by the Swiss central bank that it was contemplating selling
gold to raise money for a Swiss humanitarian fund, continued to negatively
impact the price of gold and gold equities over the six-month period. Combined
with a strong U.S. dollar and low inflation, these developments saw December
mark the lowest gold prices in over eighteen years. Demand in Asia declined
significantly due to local currency devaluations which made gold extremely
expensive there. Gold and the indices all posted their lowest figures for the
quarter in early December, gold hitting an intraday low of $281 per ounce. A
slight rise was seen toward the end of the month, as some traders closed out
their short positions.
23
<PAGE>
- --------------------------------------------------------------------------------
U.S. GLOBAL GOLD FUNDS
- --------------------------------------------------------------------------------
It has recently come to light that Argentina sold gold during the first six
months of the year, and the German central bank and the Swiss are lending their
gold into the market. These actions help to explain the extreme weakness we have
seen in bullion recently. The sale of gold, as well as the lending of gold,
increases the liquidity in the market and drives prices down. The psychological
impact of finding out that another unsuspected bank was selling its gold
reserves and that the Germans and Swiss were lending gold undermined the market
significantly.
INVESTMENT HIGHLIGHTS
On the corporate front, gold companies continue to write down marginal assets
and prepare for closure of high cost mines. Homestake Mining recently announced
asset write downs and we expect the trend to continue. Most gold companies are
focusing on staying in business and making operations profitable rather than
focusing on acquisitions. Outside of Homestake's acquisition of Plutonic we have
not yet seen many signs of consolidation within the gold industry except for
those in South Africa. Goldfields of South Africa and Gencor have agreed to
merge some of their operations to create Goldco, a company which will be the
world's second largest bullion producer. We expect that the pressure to
consolidate mining operations will be more intense in South Africa. Given the
uncertainty surrounding the gold market, the mining industry should have
additional leverage to bargain with the labor force to close down certain shafts
or areas that are no longer viable and thus achieve a lower average production
cost.
-------------------------------------------------------
WORLD GOLD
TOP 10 HOLDINGS BASED ON TOTAL INVESTMENTS
-------------------------------------------------------
The Pioneer Group, Inc...........................11.75%
Investment Advisors
Barrick Gold Corp................................ 8.43%
Major Gold Production
Euro-Nevada Mining Corp.......................... 8.04%
Mining Finance
Delta Gold, NL................................... 7.19%
Gold Production
Franco-Nevada Mining Corp........................ 6.77%
Mineral Exploration & Development
Ashanti Goldfields Co. Ltd....................... 5.14%
Major Gold Production
Getchell Gold Corp............................... 4.99%
Gold Production
Meridian Gold, Inc............................... 4.43%
Gold Production
Ranger Minerals NL............................... 3.30%
Gold Exploration
Greenstone Resources............................. 2.92%
Gold Production
Other............................................37.04%
24
<PAGE>
- --------------------------------------------------------------------------------
U.S. GLOBAL GOLD FUNDS
- --------------------------------------------------------------------------------
Some positive announcements that could indicate a bottom is near have also
appeared. Several gold companies have closed out some of their hedge positions
and realized profits. They obviously are betting that the gold price will not go
much lower, so it is advantageous for them to realize the maximum value for
their hedges. Barrick Gold also announced that it stands ready to buy back 31
million of its own shares in the open market in response to what it perceives as
its misvaluation by the market. This suggests that Barrick thinks its share
price should not fall any further regardless of the gold price, a fairly bullish
statement.
-------------------------------------------------------
GOLD SHARES
TOP 10 HOLDINGS BASED ON TOTAL INVESTMENTS
-------------------------------------------------------
The Pioneer Group, Inc...........................12.83%
Investment Advisors
Meridian Gold, Inc............................... 8.77%
Gold Mining - North America
Western Areas Gold Mining ....................... 5.07%
Gold Mining - Africa
Normandy Mining Ltd.............................. 4.39%
Gold Mining - Australia
Ashanti Goldfields Co. Ltd., .................... 3.42%
Gold Mining - Africa
Southvaal Holdings Ltd.,......................... 2.68%
Gold Mining - Africa
Major Drilling Group International............... 2.65%
Mining Services
Euro Nevada Mining Ltd........................... 2.47%
Gold Mining - North America
Resolute Resources Ltd........................... 2.19%
Gold Mining - Australia
Delta Gold NL.................................... 2.12%
Gold Mining - Australia
Other............................................53.41%
25
<PAGE>
- --------------------------------------------------------------------------------
U.S. GLOBAL GOLD FUNDS
- --------------------------------------------------------------------------------
WORLD GOLD
----------------------------------------------------------
TOP 5 INDUSTRIES -
BASED ON TOTAL INVESTMENTS
----------------------------------------------------------
12.32%..........................Gold Exploration
28.11%..........................Gold Production
11.75%..........................Investment Advisors
15.83%..........................Major Gold Productions
15.47%..........................Mining Finance
GOLD SHARES
----------------------------------------------------------
TOP 5 INDUSTRIES -
BASED ON TOTAL INVESTMENTS
----------------------------------------------------------
12.83%.........................Investment Advisors
21.97%.........................Gold Mining - Africa
3.61%.........................Mining Services
13.38%.........................Gold Mining - North America
12.86%.........................Gold Mining - Australia
CURRENT OUTLOOK
The gold mining industry will continue to rely on low cost production and
producer hedging to generate returns. Producers will continue to replace high
cost production with lower cost and higher grade output. We expect gold prices
and equities to remain under the cloud of further central bank sales and
depressed market expectations, though we do expect the spate of central bank
sales to decline once the role of gold in the European Monetary Union has been
defined.
This outlook dictates that the stocks we choose for the portfolio be low cost
producers with positive operational cash flow for continued exploration and
expansion in a low price environment. Well-hedged producers will also be high on
our list of suitable investments. We believe gold's eighteen year low represents
a bottom to the market and expect gold and gold equities to rebound from there.
26
<PAGE>
- --------------------------------------------------------------------------------
U.S. TREASURY SECURITIES CASH FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
PRINCIPAL
COUPON MATURITY AMOUNT VALUE
UNITED STATES GOVERNMENT
OBLIGATIONS 90.24%
UNITED STATES TREASURY BILLS 38.08%
................................................................................
Yield 5.07% 02/26/98 $40,000,000 $39,696,889
Yield 5.26% 03/05/98 30,000,000 29,740,117
-----------
69,437,006
UNITED STATES TREASURY BONDS 10.96%
................................................................................
5.125% 02/28/98 20,000,000 19,991,263
UNITED STATES TREASURY NOTES 41.20%
................................................................................
6.125% 03/31/98 30,000,000 30,054,396
5.875% 04/30/98 20,000,000 20,023,371
6.125% 05/15/98 25,000,000 25,056,165
------------
75,133,932
................................................................................
TOTAL UNITED STATES GOVERNMENT OBLIGATIONS 164,562,201
................................................................................
(cost $164,562,201)
REPURCHASE AGREEMENT 8.26%
Joint Repurchase Agreement Account,
Donaldson Lufkin & Jenrette,
Inc. 12/31/97, 6.5%, due 1/2/98,
repurchase price $15,073,592,
collateralized by U.S. Treasury
securities held in a joint
repurchase account
(cost $15,068,151) 6.50% 01/02/98 15,068,151 15,068,151
................................................................................
TOTAL INVESTMENTS 98.50% 179,630,352
................................................................................
(cost $179,630,352)
Other assets and liabilities,
net 1.50% 2,740,660
------------
NET ASSETS 100% $182,371,012
============
See notes to portfolios of investments.
27
<PAGE>
- --------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES SAVINGS FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
PRINCIPAL
COUPON MATURITY AMOUNT VALUE
UNITED STATES GOVERNMENT AND
AGENCY OBLIGATIONS 98.37%
FEDERAL FARM CREDIT BANK 17.49%
................................................................................
DISCOUNT NOTES: Yield 5.40% 01/29/98 $ 515,000 $ 512,790
Yield 5.41% 01/30/98 500,000 497,775
VARIABLE RATES: 5.37% 02/03/98 25,000,000 24,999,168
5.36% 05/01/98 5,000,000 4,998,551
5.10% 05/28/98 25,000,000 24,998,070
5.52% 08/11/98 500,000 499,608
5.78% 10/01/98 25,000,000 24,990,685
FIXED RATES: 4.80% 01/14/98 250,000 249,920
5.45% 03/03/98 10,000,000 9,993,660
5.74% 04/14/98 13,000,000 12,997,642
6.13% 04/23/98 500,000 500,000
5.72% 06/12/98 1,000,000 1,000,000
5.81% 06/30/98 4,955,000 4,950,158
5.40% 11/02/98 17,000,000 16,986,733
-----------
128,174,700
FEDERAL HOME LOAN BANK 69.77%
................................................................................
DISCOUNT NOTES: Yield 1.71% 01/02/98 38,712,000 38,712,000
Yield 7.93% 01/09/98 69,000,000 68,924,196
Yield 5.46% 05/06/98 11,367,000 11,151,598
Yield 6.45% 06/15/98 12,475,000 12,169,251
VARIABLE RATES: 5.80% 01/02/98 5,000,000 5,000,000
5.45% 01/15/98 1,800,000 1,799,928
5.65% 04/21/98 10,000,000 10,000,000
5.50% 07/02/98 20,000,000 19,993,092
10.00% 08/20/98 3,000,000 3,072,294
5.74% 09/17/98 20,000,000 19,988,879
5.44% 10/14/98 25,000,000 24,995,120
5.72% 10/20/98 25,000,000 25,000,000
FIXED RATES: 5.55% 01/02/98 1,000,000 1,000,000
5.68% 01/13/98 5,330,000 5,329,970
6.00% 01/13/98 500,000 500,001
5.49% 01/16/98 1,095,000 1,094,910
5.59% 01/16/98 1,000,000 999,855
28
<PAGE>
- --------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES SAVINGS FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
PRINCIPAL
COUPON MATURITY AMOUNT VALUE
FEDERAL HOME LOAN BANK
................................................................................
FIXED RATES: (cont'd) 7.93% 01/20/98 $ 250,000 $ 250,236
5.71% 01/21/98 9,600,000 9,599,762
5.81% 01/23/98 15,030,000 15,029,296
5.88% 01/30/98 10,000,000 9,999,940
4.92% 02/09/98 5,000,000 4,995,824
5.81% 02/13/98 5,000,000 4,998,306
4.81% 02/23/98 1,000,000 998,704
5.54% 03/05/98 18,000,000 17,999,073
5.79% 03/18/98 785,000 785,353
5.88% 03/18/98 5,000,000 4,999,839
5.70% 03/19/98 13,000,000 12,998,664
5.91% 04/02/98 5,950,000 5,949,167
6.02% 04/15/98 10,000,000 9,999,776
6.12% 04/17/98 165,000 165,054
5.26% 04/27/98 200,000 199,553
5.27% 05/13/98 200,000 199,485
5.45% 05/28/98 25,000 24,945
8.22% 05/29/98 1,825,000 1,842,518
6.01% 07/29/98 150,000 149,935
5.74% 08/18/98 50,000,000 49,978,462
5.80% 08/18/98 5,000,000 5,000,000
5.75% 08/20/98 20,000,000 19,994,092
5.19% 08/26/98 150,000 149,389
5.86% 09/02/98 2,500,000 2,500,000
5.80% 09/18/98 20,000,000 20,008,706
5.04% 10/01/98 2,000,000 1,988,713
5.84% 10/14/98 3,050,000 3,050,000
5.84% 10/20/98 4,000,000 4,000,000
5.69% 11/04/98 42,500,000 42,486,105
5.86% 11/25/98 5,220,000 5,217,714
5.74% 12/23/98 1,000,000 999,625
5.93% 12/23/98 4,310,000 4,310,000
5.83% 01/22/99 750,000 749,535
-----------
511,348,865
STUDENT LOAN MARKETING ASSOCIATION 11.11%
................................................................................
VARIABLE RATES: 5.40% 02/17/98 1,000,000 999,875
5.31% 02/19/98 10,000,000 10,000,000
5.36% 03/19/98 25,000,000 25,000,000
5.50% 06/18/98 5,000,000 5,000,000
5.29% 09/28/98 13,700,000 13,681,213
29
<PAGE>
- --------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES SAVINGS FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
PRINCIPAL
COUPON MATURITY AMOUNT VALUE
---- -------- ----------- -----------
STUDENT LOAN MARKETING ASSOCIATION (CONT'D)
................................................................................
FIXED RATES: 5.60% 01/21/98 $ 5,000,000 $ 5,000,091
5.54% 02/25/98 500,000 499,711
5.86% 06/10/98 300,000 300,083
5.60% 08/11/98 15,000,000 14,978,218
5.79% 09/16/98 5,000,000 4,998,233
5.29% 11/10/98 1,000,000 998,474
------------
81,455,898
................................................................................
TOTAL INVESTMENTS 98.37% 720,979,463
................................................................................
(cost $720,979,463)
Other assets and liabilities, net 1.63% 11,949,211
------------
NET ASSETS 100% $732,928,674
============
See notes to portfolios of investments.
30
<PAGE>
- --------------------------------------------------------------------------------
NEAR-TERM TAX FREE FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
PRINCIPAL
MUNICIPAL BONDS 96.22% COUPON MATURITY AMOUNT VALUE
ARIZONA 7.23%
................................................................................
Yuma Arizona Refinancing 4.55% 07/01/06 $550,000 $556,875
CALIFORNIA 2.42%
................................................................................
West Hollywood Certificates 12.00% 02/01/00 170,000 186,529
of Participation, Series A
CONNECTICUT 4.33%
................................................................................
Bridgeport Series A, GO 6.00% 03/01/06 300,000 333,375
GEORGIA 4.25%
................................................................................
Columbus Water & Sewer Revenue 6.65% 05/01/09 300,000 327,375
ILLINOIS 4.82%
................................................................................
Chicago Water Revenue 0.00% 11/01/08 275,000 165,343
Kankakee Sewer Revenue 6.30% 05/01/99 200,000 205,750
-------
371,093
IOWA 4.21%
................................................................................
Finance Authority Hospital
Facility, Revenue 5.15% 07/01/04 310,000 324,338
NEBRASKA 3.56%
................................................................................
Nebraska Public Power District,
Revenue 5.70% 01/01/05 255,000 274,444
NEVADA 6.89%
................................................................................
Nevada State Municipal Bond
Bank Project #51, Series A, GO 5.10% 01/01/08 250,000 259,375
Washoe County Gas & Water
Facilities, Revenue 6.30% 12/01/14 250,000 271,250
-------
530,625
NEW JERSEY 4.06%
................................................................................
Washington Township Board of
Education, GO 5.10% 02/01/08 300,000 313,125
OHIO 7.56%
................................................................................
Akron Bath Copley Township
Hospital District, Series A 5.90% 11/15/02 400,000 424,000
Ohio State Building Authority 7.30% 03/01/02 150,000 158,438
-------
582,438
OKLAHOMA 3.01%
................................................................................
University of Oklahoma, Revenue 12.00% 03/01/00 200,000 232,000
OREGON 4.04%
................................................................................
Portland Water System, Revenue 4.80% 08/01/05 300,000 311,625
31
<PAGE>
- --------------------------------------------------------------------------------
NEAR-TERM TAX FREE FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
PRINCIPAL
MUNICIPAL BONDS COUPON MATURITY AMOUNT VALUE
RHODE ISLAND 4.46%
................................................................................
Rhode Island State Public
Buildings Revenue 5.25% 08/01/05 $340,000 $343,431
SOUTH CAROLINA 7.44%
................................................................................
Georgetown County Pollution
Control Facilities
Revenue, Series A 7.38% 06/15/05 300,000 315,375
Charleston County Resource
Recovery, Revenue 9.25% 01/01/10 250,000 257,500
--------
572,875
TEXAS 12.76%
................................................................................
Comal Independant School
District, Revenue 4.50% 02/01/98 105,000 105,051
Dallas Civic Center, Revenue 6.10% 01/01/08 205,000 205,193
Haltom City Tax Notes: 4.30% 02/01/98 180,000 180,009
4.50% 02/01/99 185,000 185,721
4.70% 02/01/00 195,000 197,194
Harris County, Revenue 10.00% 10/01/99 100,000 109,750
--------
982,918
UTAH 8.28%
................................................................................
Municipal Finance COOP Local
Government, Revenue 6.40% 08/01/09 300,000 322,875
Weber County School District,
Series A, GO 5.15% 06/15/08 300,000 315,000
--------
637,875
WASHINGTON 4.18%
................................................................................
King County, Series A, GO 5.80% 12/01/06 300,000 321,750
WISCONSIN 2.72%
................................................................................
State Health & Educational Facilities
Revenue 5.20% 06/01/05 200,000 209,750
................................................................................
TOTAL MUNICIPAL BONDS 7,412,441
................................................................................
(cost $7,272,419)
REPURCHASE AGREEMENT 2.39%
Joint Repurchase Agreement Account,
Prudential Securities, Inc.,
12/31/97, 6.6%, due 1/2/98
repurchase price $184,068,
collateralized by U.S. Treasury
securities held in a joint
repurchase account
(cost $184,001) 6.60% 01/02/98 184,001 184,001
................................................................................
TOTAL INVESTMENTS 98.61% 7,596,442
................................................................................
(cost $7,456,421)
Other assets and liabilities, net 1.39% 107,288
----------
................................................................................
NET ASSETS 100% $7,703,730
==========
................................................................................
See notes to portfolios of investments.
32
<PAGE>
- --------------------------------------------------------------------------------
TAX FREE FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
PRINCIPAL
MUNICIPAL BONDS 97.38% COUPON MATURITY AMOUNT VALUE
ARIZONA 2.50%
................................................................................
Cocinino County School District,
Refunding (WI) 5.00% 07/01/06 $500,000 $513,125
CONNECTICUT 2.64%
................................................................................
Connecticut State Development Authority
Water Facility Revenue,
Refunding 7.25% 06/01/20 500,000 540,625
FLORIDA 3.85%
................................................................................
Florida State Board of Education Capital
Outlay GO Unlimited Tax, Refunding,
Series A 6.625% 06/01/07 700,000 788,375
GEORGIA 1.18%
................................................................................
Savannah Hospital Authority
Revenue 6.20% 07/01/23 230,000 241,500
HAWAII 2.04%
................................................................................
Hawaii State Department of Budget
and Finance 6.00% 07/01/19 400,000 418,000
ILLINOIS 10.44%
................................................................................
Boone McHenry and Dekalb Counties
Community Unit School District 0.00% 12/01/08 1,000,000 596,250
Illinois Development Financing
Authority Revenue, Series B 6.25% 09/01/17 250,000 269,375
Illinois Health Facility Authority
Revenue, Series A 6.80% 01/01/22 400,000 426,500
Illinois Regional Transportation
Authority Revenue, Series A 7.20% 11/01/20 250,000 323,125
Lake County School District GO
Limited 5.375% 01/01/11 500,000 524,375
---------
2,139,625
INDIANA 7.80%
................................................................................
Fort Wayne Water Works Revenue 4.75% 12/01/10 500,000 496,250
Indiana Health Facility Finance
Authority Revenue, Series A 5.75% 08/01/08 540,000 566,325
South Bend Water Works Revenue 4.75% 01/01/10 540,000 535,275
---------
1,597,850
MASSACHUSETTS 2.67%
................................................................................
Massachusetts State Health &
Educational Facilities Authority
Revenue, Refunding Issue A 7.10% 07/01/21 500,000 546,250
MICHIGAN 2.36%
................................................................................
Wyoming Building Authority 5.25% 05/01/18 480,000 483,000
MISSISSIPPI 2.02%
................................................................................
Vicksburg Leased Housing Corp.
Housing Revenue, Refunding,
Series A 6.125% 02/15/22 400,000 413,000
33
<PAGE>
- --------------------------------------------------------------------------------
TAX FREE FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
PRINCIPAL
MUNICIPAL BONDS COUPON MATURITY AMOUNT VALUE
NEVADA 4.37%
................................................................................
Clark County Las Vegas
Convention & Visitors
Authority, GO Limited Tax 5.50% 07/01/17 $870,000 $895,012
NEW JERSEY 2.60%
................................................................................
Warren Township Independent
School Building Corp.,
Series A 6.00% 07/15/12 500,000 533,125
NORTH CAROLINA 3.52%
................................................................................
North Carolina Eastern Municipal
Power Agency, Revenue, Refunding,
Series A 5.60% 01/01/10 675,000 722,250
OHIO 2.44%
................................................................................
Olentangy Local School District,
GO Limited Tax, Series A 6.25% 12/01/15 240,000 263,700
South Euclid Special Assessment,
GO Limited 6.70% 12/01/14 200,000 237,250
---------
500,950
PENNSYLVANIA 3.09%
................................................................................
Allegheny County Hospital
Development Authority, Revenue,
Refunding 6.00% 05/01/20 365,000 374,125
Chester County Health & Education
Facilities Authority, Revenue 5.00% 05/15/08 250,000 259,375
---------
633,500
RHODE ISLAND 5.12%
................................................................................
North Providence GO Unlimited Tax,
Series A 6.05% 07/01/13 500,000 553,125
Providence Public Building Authority
Revenue, Series B 7.25% 12/15/10 450,000 496,125
---------
1,049,250
SOUTH CAROLINA 3.77%
................................................................................
Charleston County Resource
Recovery Revenue, Series A 9.25% 01/01/10 750,000 772,500
TENNESSEE 1.41%
................................................................................
State Development Authority Revenue,
Series 1992 7.00% 10/01/11 265,000 289,844
TEXAS 20.35%
................................................................................
Comal Independent School District: 4.50% 02/01/98 110,000 110,054
4.75% 02/01/99 230,000 230,920
4.90% 02/01/00 240,000 242,400
5.00% 02/01/01 255,000 258,506
34
<PAGE>
- --------------------------------------------------------------------------------
TAX FREE FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
PRINCIPAL
MUNICIPAL BONDS COUPON MATURITY AMOUNT VALUE
TEXAS 20.35% (CONT'D)
................................................................................
Cypress Fairbanks Independent
School District 4.75% 02/15/20 $420,000 $397,425
Eagle Pass Independent School
District 4.50% 08/15/17 500,000 463,125
Gulf Coast Water Systems
Authority 5.00% 08/15/17 500,000 492,500
Humble Independent School
District 5.10% 02/15/13 500,000 504,375
Pearland Certificates of
Obligation, Series A 5.25% 03/01/13 305,000 310,719
State Water Development Board,
Revenue 5.00% 07/15/19 500,000 492,500
Tara Glen Municipal District,
GO Unlimited Tax: 5.75% 03/01/20 300,000 315,375
University of Houston 5.00% 02/15/14 355,000 352,337
---------
4,170,236
VIRGINIA 2.15%
................................................................................
State Housing Development Authority
Multifamily, Revenue, Series E 5.90% 11/01/17 425,000 441,469
WASHINGTON 1.59%
................................................................................
Seattle Indian Services, Refunding
Revenue 6.50% 11/01/17 305,000 326,350
WEST VIRGINIA 7.69%
................................................................................
Berkeley County Hospital Revenue,
Refunding: 6.50% 11/01/09 115,000 123,338
6.50% 11/01/22 280,000 298,550
West Virginia Housing Development
Revenue, Series A 6.05% 05/01/27 790,000 839,375
West Virginia State Hospital
Finance Authority Revenue 6.10% 01/01/18 300,000 315,000
---------
1,576,263
WYOMING 1.78%
................................................................................
Wyoming Community Development
Authority, 6.10% 06/01/33 350,000 364,875
Series A
................................................................................
TOTAL MUNICIPAL BONDS 19,956,974
................................................................................
(Cost $19,137,829)
REPURCHASE AGREEMENT 6.62%
Joint Repurchase Agreement
Account, Prudential Securities,
Inc., 12/31/97, 6.6%, due 1/2/98,
repurchase price $1,357,931,
collateralized by U.S. Treasury
securities held in a joint
repurchase account
(cost $1,357,433) 6.60% 01/02/98 1,357,433 1,357,433
................................................................................
TOTAL INVESTMENTS 104.00% 21,314,407
................................................................................
(Cost $20,495,263)
Other assets and liabilities, net (4.00)% (820,822)
----------
NET ASSETS 100% $20,493,585
===========
See notes to portfolios of investments.
35
<PAGE>
- --------------------------------------------------------------------------------
INCOME FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS 100.56% SHARES VALUE
BANKS 2.42%
................................................................................
Allied Irish Banks, plc, ADR 3,500 $ 89,469
Banc One Corp. 2,500 135,781
--------
225,250
BUSINESS SERVICES 1.33%
................................................................................
Dun & Bradstreet Corp. 4,000 123,750
CHEMICAL & PHARMACEUTICALS 3.29%
................................................................................
Hanson, plc, ADR 2,062 47,555
Pharmacia & Upjohn, Inc. 3,000 109,875
Warner-Lambert Co. 1,200 148,800
--------
306,230
COMMUNICATION EQUIPMENT 1.44%
................................................................................
Scientific-Atlanta, Inc. 8,000 134,000
COMMUNICATION SERVICES 1.30%
................................................................................
Comsat Corp. 5,000 121,250
COMPUTERS & DATA PROCESSING 1.89%
................................................................................
Electronic Data Services Corp. 2,000 87,875
First Data Corp. 3,000 87,750
--------
175,625
ELECTRIC SERVICES 24.20%
................................................................................
American Electric Power, Inc. 4,000 206,500
Baltimore Gas & Electric Co. 3,000 102,187
Central & South West Corp. 5,000 135,312
DPL, Inc. 4,000 115,000
DQE, Inc. 4,000 140,500
Duke Energy Corp. 5,664 313,644
Energy Group, plc, ADR 2,062 92,017
FPL Group, Inc. 3,000 177,562
Houston Industries 4,000 106,750
Minnesota Power & Light Co. 3,000 130,688
Sierra Pacific Resources 5,000 187,500
Southern Co. 7,000 181,125
TNP Enterprises 2,000 66,500
Washington Water Power Co. 5,000 121,563
Western Resources, Inc. 4,000 172,000
--------
2,248,848
ENTERTAINMENT 0.27%
................................................................................
Ascent Entertainment Group 2,444 25,357
36
<PAGE>
- --------------------------------------------------------------------------------
INCOME FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS SHARES VALUE
FINANCIAL SERVICES 1.74%
................................................................................
Travelers Group, Inc. 3,000 $161,625
FOOD & BEVERAGES 3.09%
................................................................................
H.J. Heinz Co. 3,500 177,844
PepsiCo, Inc. 3,000 109,313
--------
287,157
INSTRUMENTS 1.09%
................................................................................
Baxter International, Inc. 2,000 100,875
MOTOR VEHICLES 1.57%
................................................................................
Ford Motor Co. 3,000 146,063
NATURAL GAS TRANSMISSION & DISTRIBUTION 8.92%
................................................................................
AGL Resources, Inc. 5,300 108,319
Consolidated Natural Gas Co. 3,000 181,500
MCN Energy Group, Inc. 4,000 161,500
New Jersey Resources Corp. 5,000 200,313
Peoples Energy 4,500 177,188
--------
828,820
OIL & GAS EXTRACTION 1.57%
................................................................................
Enron Corp. 3,500 145,469
PETROCHEMICAL & COAL PRODUCTS 2.26%
................................................................................
Lyondell Petrochemical Co. 7,923 209,960
PETROLEUM REFINING 5.03%
................................................................................
Amoco Corp. 1,000 85,125
Chevron Corp. 1,500 115,500
Exxon Corp. 2,000 122,375
Mobil Corp. 2,000 144,375
--------
467,375
PHOTOGRAPHY 1.59%
................................................................................
Xerox Corp. 2,000 147,625
37
<PAGE>
- --------------------------------------------------------------------------------
INCOME FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS SHARES VALUE
REAL ESTATE INVESTMENT TRUSTS 11.23%
................................................................................
American Health Properties, Inc. 3,000 $ 82,687
Capstead Mortgage Corp. 4,000 79,750
Commercial Net Lease Realty 10,000 178,750
Equity Resident Property Trust 2,500 126,406
Essex Property Trust, Inc. 3,000 105,000
Glimcher Realty Trust 5,000 112,812
Liberty Property Trust 4,000 114,250
Starwood Lodging Trust 2,000 115,750
Walden Residential Properties 5,000 128,437
---------
1,043,842
TELECOMMUNICATIONS 24.86%
................................................................................
360 Communications Co. 4,166 84,101
AT&T Corp. 3,500 214,375
Bell Atlantic Corp. 2,652 241,332
Century Telephone Enterprises 3,500 174,344
Frontier Corp. 6,500 156,406
GTE Corp. 3,500 182,875
Lucent Technologies, Inc. 3,148 251,446
MCI Communications Corp. 3,000 128,437
SBC Communications, Inc. 2,000 146,500
Sprint Corp. 3,000 175,875
Telebras, ADR 1,000 116,437
Telefonica de Espana,S.A., ADR 1,000 91,062
US West Communications Group 5,000 225,625
WorldCom, Inc. 4,000 121,000
---------
2,309,815
WHOLESALE FOOD SUPPLIES 1.47%
................................................................................
Sysco Corp. 3,000 136,688
................................................................................
TOTAL COMMON STOCKS 9,345,624
................................................................................
(cost $7,211,031)
PREFERRED STOCKS 4.14%
ELECTRIC SERVICES 2.74%
................................................................................
Duke Energy Quarterly Income Preferred 7.2% 10,000 255,000
38
<PAGE>
- --------------------------------------------------------------------------------
INCOME FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
PREFERRED STOCKS (cont'd) SHARES VALUE
REAL ESTATE INVESTMENT TRUSTS 1.40%
................................................................................
Public Storage, Inc., 8.875%, Series G 5,000 $ 129,375
................................................................................
TOTAL PREFERRED STOCKS 384,375
................................................................................
(cost $375,000)
PRINCIPAL
CONVERTIBLE SECURITIES 2.00% AMOUNT
GOLD AND SILVER MINING
................................................................................
Ashanti Capital, Ltd. Exchangeable Note,
5.50%, 03/15/03 exchangeable at
maturity into Shares or Global
Depository Shares of Ashanti
Goldfields Company Limited $250,000 186,250
................................................................................
TOTAL CONVERTIBLE SECURITIES 186,250
................................................................................
(cost $203,750)
REPURCHASE AGREEMENT 8.74%
Joint Repurchase Agreement Account,
Prudential Securities, Inc., 12/31/97
6.6%, due 1/2/98, repurchase price
$812,604, collateralized by U.S.
Treasury securities held in a joint
repurchase account
(cost $812,306) 812,306 812,306
................................................................................
TOTAL INVESTMENTS 115.44% 10,728,555
................................................................................
(cost of $8,602,087)
Other assets and liabilities, net (15.44)% (1,434,747)
----------
NET ASSETS 100% $9,293,808
==========
See notes to portfolios of investments.
39
<PAGE>
- --------------------------------------------------------------------------------
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS 86.99% SHARES VALUE
AIRCRAFT & AEROSPACE 1.22%
................................................................................
AlliedSignal, Inc. 2,200 $ 85,662
The Boeing Co. 2,950 144,366
Raytheon Company, Class A 191 9,419
Rockwell International Corp. 1,800 94,050
---------
333,497
APPAREL .49%
................................................................................
Converse Inc. 5,000 30,000*
Tommy Hilfiger 3,000 105,375*
---------
135,375
BANKS 4.09%
................................................................................
Banc One Corp. 1,760 95,590
BankAmerica Corp. 5,000 365,000
Chase Manhattan Corp. 2,400 262,800
Citicorp 1,600 202,300
NationsBank Corp. 3,200 194,600
---------
1,120,290
BEVERAGES 4.75%
................................................................................
Anheuser Busch Co. 2,000 88,000
Coca Cola Co. 13,000 866,125
PepsiCo, Inc. 8,200 298,787
Seagram Co. Ltd. 1,500 48,469
---------
1,301,381
BROADCAST/MEDIA .64%
................................................................................
Tele-Communications, Class A 2,200 61,463*
US West Media Group 1,800 51,975
Viacom, Inc., Class A 1,500 61,313*
---------
174,751
BUSINESS SERVICES 1.00%
................................................................................
Dun & Bradstreet Corp. 2,000 61,875
Norwood Promotional Products 8,500 129,625*
Solectron Corp. 2,000 83,125*
---------
274,625
CHEMICALS 1.55%
................................................................................
Dow Chemical Co. 1,000 101,500
E.I. Du Pont de Nemours & Co. 5,400 324,337
---------
425,837
40
<PAGE>
- --------------------------------------------------------------------------------
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS SHARES VALUE
COMMUNICATION EQUIPMENT .96%
................................................................................
InterVoice, Inc. 3,000 $ 22,500*
Lucent Technologies, Inc. 3,000 239,625
---------
262,125
COMPUTER & OFFICE EQUIPMENT 5.96%
................................................................................
Apple Computer, Inc. 3,000 39,375*
Cisco Systems, Inc. 4,500 250,875*
COMPAQ Computer Corp. 2,500 141,094
Diebold, Inc. 3,000 151,875
Hewlett-Packard Co. 5,000 312,500
IBM Corp. 5,600 585,550
Minnesota Mining & Manufacturing Co. 1,700 139,506
NCR Corp. 468 13,016*
---------
1,633,791
DATA PROCESSING & SOFTWARE 5.16%
................................................................................
Automatic Data Processing, Inc. 1,000 61,375
Computer Associates International 3,000 158,625
First Data Corp. 10,000 292,500
Informix Corp. 1,000 4,750*
Microsoft Corp. 5,600 723,800*
Oracle Corp. 5,212 116,293*
Reynolds & Reynolds Co., Class A 3,000 55,313
---------
1,412,656
EATING & DRINKING PLACES .77%
................................................................................
McDonald's Corp. 3,800 181,450
Tricon Global Restaurants 1,000 29,063*
---------
210,513
ELECTRIC UTILITY .19%
................................................................................
P G & E Corp. 1,700 51,744
ELECTRONICS & COMPONENTS 3.98%
................................................................................
Carlisle Cos., Inc. 2,200 94,050
Emerson Electric Co. 1,800 101,587
Intel Corp. 8,400 590,100
Motorola, Inc. 3,000 171,187
Technitrol, Inc. 4,400 132,000
---------
1,088,924
41
<PAGE>
- --------------------------------------------------------------------------------
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS SHARES VALUE
ENTERTAINMENT 1.79%
................................................................................
Liberty Media Group, Class A 825 $ 29,906*
The Walt Disney Co. 3,700 366,531
Time Warner, Inc. 1,500 93,000
---------
489,437
FINANCIAL SERVICES 6.84%
................................................................................
American Express Co. 2,900 258,825
BISYS Group, Inc. 7,000 232,750*
Conseco, Inc. 3,000 136,312
Credit Acceptance Corp. 6,000 46,500*
Equity Corp International 2,000 46,250*
Fannie Mae 8,500 485,031
Freddie Mac 3,800 159,362
Green Tree Financial Corp. 4,000 104,750
J.P. Morgan & Co., Inc. 700 79,013
Travelers Group, Inc. 6,000 323,250
---------
1,872,043
FOOD 1.18%
................................................................................
Archer-Daniels-Midland Co. 2,315 50,207
H.J. Heinz Co. 1,500 76,219
Kellogg Co. 1,800 89,325
Sara Lee Corp. 1,900 106,994
---------
322,745
FUNERAL SERVICES .28%
................................................................................
Loewen Group, Inc. 3,000 77,438
HEALTHCARE & EQUIPMENT 3.01%
................................................................................
Allegiance Corp. 220 7,796
Columbia/HCA Healthcare Corp. 3,600 106,650
Humana, Inc. 6,300 130,725
Johnson & Johnson Co. 8,000 527,000
Veterinary Centers, Inc. 4,000 53,750*
---------
825,921
HOUSEHOLD APPLIANCES 3.43%
................................................................................
General Electric Co. 12,800 939,200
42
<PAGE>
- --------------------------------------------------------------------------------
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS SHARES VALUE
HOUSEHOLD PRODUCTS 2.64%
................................................................................
Colgate Palmolive 1,400 $102,900
Gillette Co. 1,400 140,612
Proctor & Gamble Co. 6,000 478,875
---------
722,387
INSTRUMENTS .16%
................................................................................
Guidant Corp. 704 43,824
INSURANCE 3.54%
................................................................................
Allstate Corp. 3,297 299,615
American Annuity Group, Inc. 8,000 176,000
American International Group 3,600 391,500
Hartford Financial Services Group, Inc. 400 37,425
HCC Insurance Holdings, Inc. 3,000 63,750
---------
968,290
MACHINERY .57%
................................................................................
Caterpillar, Inc. 3,200 155,400
MOTOR VEHICLES & PARTS 2.00%
................................................................................
Chrysler Corp. 4,130 145,324
Ford Motor Co. 4,000 194,750
General Motors Corp. 3,000 181,875
ITT Industries, Inc. 400 12,550
Meritor Automotive, Inc. 600 12,638
---------
547,137
OIL & GAS EXTRACTION .81%
................................................................................
Atlantic Richfield Co. 1,200 96,150
Enron Corp. 3,000 124,688
---------
220,838
PETROLEUM REFINING 4.70%
................................................................................
AMOCO Corp. 1,700 144,712
Chevron Corp. 2,600 200,200
Exxon Corp. 5,800 354,887
Mobil Corp. 3,200 231,000
Phillips Petroleum Co. 1,100 53,488
Royal Dutch Petroleum 3,600 195,075
Texaco, Inc. 2,000 108,750
---------
1,288,112
43
<PAGE>
- --------------------------------------------------------------------------------
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS SHARES VALUE
PHARMACEUTICALS 10.60%
................................................................................
Abbott Laboratories 3,000 $196,687
American Home Products 3,200 244,800
Baxter International, Inc. 1,100 55,481
Biogen, Inc. 2,000 72,750*
Bristol-Myers Squibb Co. 3,400 321,725
Eli Lilly & Co. 6,396 445,322
Merck & Co., Inc. 6,000 637,500
Pfizer, Inc. 6,800 507,025
Schering-Plough Corp. 4,800 298,200
Warner-Lambert Co. 1,000 124,000
---------
2,903,490
PHOTOGRAPHY 1.06%
................................................................................
Eastman Kodak Co. 3,300 200,681
Xerox Corp. 1,200 88,575
---------
289,256
REAL ESTATE .84%
................................................................................
Felcor Suite Hotels, Inc. 2,000 71,000
Weeks Corp. 5,000 160,000
---------
231,000
RETAIL 3.72%
................................................................................
Amway Asia Pacific Ltd. 6,000 117,000
Garden Ridge Corp. 6,000 85,500*
Home Depot, Inc. 4,200 247,275
OfficeMax, Inc. 5,000 71,250*
Sears, Roebuck and Co. 2,400 108,600
Toys "R" Us, Inc. 1,100 34,581*
Wal-Mart Stores, Inc. 9,000 354,938
---------
1,019,144
SANITARY SERVICES .40%
................................................................................
Browning Ferris Industries, Inc. 1,600 59,200
Waste Management, Inc. 1,800 49,500
---------
108,700
44
<PAGE>
- --------------------------------------------------------------------------------
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS SHARES VALUE
TELECOMMUNICATIONS 6.64%
................................................................................
360 Communications Co. 6,466 $130,532
AT&T Corp. 7,500 459,375
Airtouch Communications, Inc. 3,000 124,687*
Ameritech Corp. 2,000 161,000
Bell Atlantic Corp. 2,905 264,355
Bellsouth Corp. 1,600 90,100
GTE Corp. 4,800 250,800
MCI Communications Corp. 2,700 115,594
Sprint Corp. 2,400 140,700
US West Communications Group 1,800 81,225
-----------
1,818,368
TOBACCO 2.02%
................................................................................
Philip Morris, Inc. 12,200 552,813
................................................................................
TOTAL COMMON STOCKS 23,821,052
................................................................................
(cost $13,654,819)
PRINCIPAL
REPURCHASE AGREEMENT 14.72% AMOUNT
Joint Repurchase Agreement Account,
Prudential Securities, Inc., 12/31/97,
6.6%, due 1/2/98, repurchase price
$4,032,702, collateralized by
U.S. Treasury securities held in a
joint repurchase account
(cost $4,031,224) $4,031,224 $4,031,224
................................................................................
TOTAL INVESTMENTS 101.71% 27,852,276
................................................................................
(cost $17,686,043)
Other assets and liabilities, net (1.71)% (468,124)
-----------
NET ASSETS 100% $27,384,152
===========
See notes to portfolios of investments.
45
<PAGE>
- --------------------------------------------------------------------------------
REAL ESTATE FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS
AND WARRANTS 91.57% SHARES VALUE
REAL ESTATE INVESTMENT TRUSTS 82.68%
APARTMENTS 16.30%
................................................................................
Avalon Properties, Inc. 13,500 $417,656
Bay Apartment Communities 14,000 546,000
Camden Property Trust 13,000 403,000
Equity Resident Property Trust 6,500 328,656
Essex Property Trust, Inc. 13,000 455,000
Security Capital Pacific Trust 20,571 498,847
Security Capital Pacific Trust Warrants 1,082 5,681
---------
2,654,840
DIVERSIFIED 8.73%
................................................................................
Duke Realty Investments, Inc. 18,000 436,500
Liberty Property Trust 19,500 556,969
Spieker Properties, Inc. 10,000 428,750
---------
1,422,219
HOTEL/RESTAURANT 15.14%
................................................................................
American General Hospitality Corp. 10,000 267,500
Felcor Suite Hotels, Inc. 10,000 355,000
Legacy Hotels 35,000 146,951
Patriot American Hospitality, Inc. Pfd. Ctf 16,998 489,755
Promus Hotel Corp. 5,000 210,000*
Royal Host 20,000 103,565
Starwood Lodging Trust 6,500 376,188
Sunstone Hotel Investors, Inc. 30,000 517,500
---------
2,466,459
MANUFACTURED HOMES 4.88%
................................................................................
Manufactured Home Communities 19,500 526,500
Sun Communities, Inc. 7,500 269,531
---------
796,031
OFFICE PROPERTY 8.42%
................................................................................
Cornerstone Properties, Inc. 20,000 383,750
Crescent Real Estate Equities 10,000 393,750
Parkway Properties, Inc. 10,000 343,125
Trinet Corp. Realty Trust, Inc. 6,500 251,469
---------
1,372,094
REGIONAL MALLS 1.04%
................................................................................
Westfield America, Inc. 10,000 170,000
SHOPPING CENTERS 6.65%
................................................................................
Developers Diversified Realty Corp. 10,000 382,500
Excel Realty Trust, Inc. 12,000 378,000
JDN Realty Corp. 10,000 323,750
---------
1,084,250
46
<PAGE>
- --------------------------------------------------------------------------------
REAL ESTATE FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS
AND WARRANTS SHARES VALUE
STORAGE 3.01%
................................................................................
Public Storage, Inc. 16,700 $490,562
WAREHOUSE/INDUSTRIAL 18.51%
................................................................................
Arden Realty Group, Inc. 14,000 430,500
Bedford Property Investors, Inc. 25,000 546,875
Brandywine Realty Trust 11,500 288,937
Cali Realty Corp. 8,000 328,000
CarrAmerica Realty Corp. 15,000 475,312
First Industrial Realty 14,000 505,750
Reckson Associates Realty Corp. 17,400 441,525
---------
3,016,899
OTHER 8.89%
HOTELS & MOTELS 3.38%
................................................................................
Aztar Corp. 13,000 81,250*
Host Marriott Corp. 23,900 469,037*
---------
550,287
INDUSTRIAL CONSTRUCTION .90%
................................................................................
Lend Lease Corp. Ltd. 7,500 146,644
OFFICE PROPERTY MANAGEMENT .15%
................................................................................
Crescent Operating, Inc. 1,000 24,500*
REAL ESTATE DEVELOPMENT 4.46%
................................................................................
Catellus Development Corp. 25,000 500,000*
Trizec Hahn Corp. 9,800 227,238
---------
727,238
................................................................................
TOTAL COMMON STOCKS 14,922,023
................................................................................
(cost $11,542,775)
47
<PAGE>
- --------------------------------------------------------------------------------
REAL ESTATE FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
PRINCIPAL
REPURCHASE AGREEMENT 10.76% AMOUNT VALUE
Joint Repurchase Agreement Account,
Prudential Securities, Inc.,
12/31/97, 6.6%, due 1/2/98,
repurchase price $1,754,487,
collateralized by U.S. Treasury
securities held in a joint
repurchase account:
(Cost $1,753,844) $1,753,844 $1,753,844
................................................................................
TOTAL INVESTMENTS 102.33% 16,675,867
................................................................................
(cost $13,296,619)
Other assets and liabilities, net (2.33)% (379,095)
-----------
NET ASSETS 100% $16,296,772
===========
See notes to portfolios of investments.
48
<PAGE>
- --------------------------------------------------------------------------------
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS
AND WARRANTS 98.63% SHARES VALUE
AGRICULTURE 1.07%
................................................................................
CP Pokphand Co. Ltd. 800,000 $125,952
Shanghai Dajiang Co. Ltd., Group B 986,634 147,995
----------
273,947
APPAREL - WHOLESALE 3.19%
................................................................................
Chaifa Holdings Ltd. 840,800 49,912
Giordano International Ltd. 299,000 103,216
Li & Fung Ltd. 474,000 663,685
----------
816,813
BANKING/FINANCIAL SERVICES 6.52%
................................................................................
HSBC Holdings Ltd. 67,749 1,669,901
BEVERAGES .49%
................................................................................
Guangdong Brewery Holdings Ltd. 43,000 6,104*
Vitasoy International Holdings Ltd. 284,000 120,028
----------
126,132
CHEMICALS & ALLIED PRODUCTS 5.60%
................................................................................
Jilin Chemical Industrial Company Ltd., Class H 2,308,000 268,060
Shang Inner Mongolia Erdos Cashmere 337,700 114,818
Shanghai Chlor-Alkali Chemical Co., Group B 630,960 108,525
Shanghai Petrochemical, Class H 2,932,000 457,829
Tianjin Bohai Chemical, Class H 1,248,000 153,000*
Yizheng Chemical Fibre, Class H 1,844,000 333,153
----------
1,435,385
COMPUTERS & OFFICE EQUIPMENT 3.45%
................................................................................
Acer, Inc. GDR 13,125 100,406*
Founder Hong Kong Ltd. 798,822 494,818
GVC Corp. GDR 74 527*
Vanda Systems & Communications Holdings Ltd. 1,384,000 287,552
----------
883,303
CONGLOMERATES 12.90%
................................................................................
Beijing Enterprise Holdings 50,000 128,404*
China Vanke Co. Ltd. 66,380 38,548
Citic Pacific Ltd. 228,200 909,973*
First Pacific Company, Ltd. 635,230 307,409
Guangdong Investments 444,000 295,083
Guangzhou Investment Co. Ltd. 500,000 103,884
Hutchinson Whampoa 96,000 600,852
Shanghai Industrial Holdings Ltd. 129,000 480,275
Swire Pacific Ltd., Group A 80,000 440,831
----------
3,305,259
49
<PAGE>
- --------------------------------------------------------------------------------
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS
AND WARRANTS SHARES VALUE
CONSTRUCTION EQUIPMENT .35%
................................................................................
Shanghai Jintai Machinery, Group B 1,194,550$ 88,397*
CREDIT & FINANCIAL SERVICES 1.65%
................................................................................
Aeon Credit Service 694,000 152,252
Guoco Group, Ltd. 110,000 269,712
----------
421,964
ELECTRIC GENERATION .93%
................................................................................
Dongfang Electrical Machinery Co. Ltd., Class H 766,000 111,702
Harbin Power Equip Co. Ltd., Class H 1,042,000 125,056
----------
236,758
ELECTRONIC EQUIPMENT 2.08%
................................................................................
ASM Pacific Technology Ltd. 686,000 433,785
GP Batteries Int'l Ltd. 30,000 77,959
Samsung Electronics, GDR 3,512 19,755*
----------
531,499
FURNITURE .55%
................................................................................
Lamex Holdings Ltd. 1,096,551 141,509
GLASS & CEMENT PRODUCTS .73%
................................................................................
Huaxin Cement Co. Ltd., Group B 904,600 81,414*
Luoyang Glasswork, Class H 962,000 86,902
Shanghai Yaohua Pilkington Glass Co. Ltd., Group B 125,750 17,354
----------
185,670
GROCERIES - WHOLESALE 3.99%
................................................................................
Guangnan Holdings Ltd. 540,000 442,509
Guangnan Holdings, Warrants 25,521 2,865
NG Fung Hong Ltd. 548,000 576,358
----------
1,021,732
HEAVY CONSTRUCTION 1.44%
................................................................................
Anhui Expressway Co. Ltd. 726,000 125,544
GZI Transport Ltd. 25,769 8,646
GZI Transport Ltd., Warrants 5,154 153
New World Infrastructure Hong Kong 31,201 70,664*
Road King Infrastructure Ltd. 180,000 164,925
----------
369,932
HOTELS 1.26%
................................................................................
Shanghai New Asia, Group B 1,198,560 323,611
50
<PAGE>
- --------------------------------------------------------------------------------
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS
AND WARRANTS SHARES VALUE
HOUSEHOLD APPLIANCES 6.11%
................................................................................
Guangdong Kelon Electronics Holdings 926,000 $955,994
Hualing Holdings Ltd. 1,344,000 114,472*
Hualing Holdings, Warrants 268,800 4,371*
Shanghai Shangling Electronics Appliance 363,360 74,852*
Shenzhen Konka Electronic Holdings, Group B 385,000 415,357
----------
1,565,046
INDUSTRIAL/COMMERCIAL MACHINERY 1.40%
................................................................................
First Tractor Co. Ltd., Class H 198,000 119,454*
Shanghai Automation Instrumentation, Group B 1,777,148 191,932*
Shanghai Diesel Engine Ltd., Group B 376,320 47,416*
----------
358,802
INVESTMENT ADVISOR .72%
................................................................................
Regent Pacific Group Ltd. 592,000 183,353
MANUFACTURING 3.24%
................................................................................
Shanghai Hero Pen, Group B 763,377 181,684
Varitronix International 317,000 544,083
Yageo Corporation 1 12*
Yue Yuen Industrial Holdings Ltd. 49,200 104,127
----------
829,906
METAL INDUSTRIES .87%
................................................................................
Jiang Xi Copper Company Ltd. 100,000 11,098*
Maanshan Iron & Steel Co., Class H 340,000 38,173
Shanghai Steel Tubes, Group B 269,280 23,158*
Shenzhen Fangda Co. Ltd. 131,500 151,032
----------
223,461
MOTOR VEHICLES & TRANSPORTATION 5.62%
................................................................................
Qingling Motors Co. Ltd., Class H 1,224,000 600,232
Shanghai Dazhong, Group B 1,121,502 838,884*
----------
1,439,116
OFFICE SUPPLIES .68%
................................................................................
China First Pencil Company Ltd. 919,165 174,641
PETROLEUM REFINING 2.40%
................................................................................
Zhenhai Refining & Chemical Co. Ltd., Class H 1,465,000 614,434
51
<PAGE>
- --------------------------------------------------------------------------------
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS
AND WARRANTS SHARES VALUE
PHARMACEUTICALS .54%
................................................................................
Livzon Pharmaceutical, Group B 564,566 $139,156*
PHOTOGRAPHY .44%
................................................................................
China HK Photo Products Holdings 450,000 112,660
REAL ESTATE DEVELOPERS 8.39%
................................................................................
Cheung Kong Holdings Ltd. 40,000 261,969
China Overseas Land & Investment 870,000 266,647
China Resources Enterprise Ltd. 184,000 410,789
Lai Sun Development Co. Ltd. 40,000 13,163
New World Development Co. 135,779 469,593
Shanghai Lujiazhui Finance, Group B 277,060 216,107*
Shum Yip Investment Ltd. 350,000 137,760
Silver Grant International Industries Ltd. 940,000 198,942
Sun Hung Kai Properties HK 25,000 175,023
----------
2,149,993
RETAIL 3.88%
................................................................................
Amway Asia Pacific Ltd. 15,000 292,500
China Everbright-IHD Pacific Ltd. 200,000 161,311*
Glorious Sun Enterprises Ltd. 984,000 257,143
Shanghai Friendship & O/S Chinese, Group B 1,003,088 282,871
----------
993,825
RUBBER & PLASTICS PRODUCTS .13%
................................................................................
Shanghai Tyre & Rubber Co., Group B 133,000 33,250
SECURITY & COMMODITY BROKERS 1.77%
................................................................................
Peregrine Investment Holdings Ltd. 640,000 454,252
Peregrine Investments, Warrants 4,000 0
----------
454,252
TELECOMMUNICATIONS 2.14%
................................................................................
Hong Kong Telecommunications, Ltd. 187,540 387,229
Shanghai Post & Telecom, Group B 613,210 160,661
----------
547,890
TEXTILE MILL PRODUCTS 1.79%
................................................................................
First Sign International Holdings 620,000 29,204*
Shanghai Haixin Co., Group B 662,350 291,434
Shanghai Lian Hua Fibre, Group B 268,780 31,716*
Shanghai Sanmao Textile Class, Group B 967,670 106,444
----------
458,798
52
<PAGE>
- --------------------------------------------------------------------------------
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS
AND WARRANTS SHARES VALUE
TRAVEL SERVICES .95%
................................................................................
China Travel International Investment 500,000 $161,311
Shanghai China International Travel, Group B 242,500 82,450
----------
243,761
UNIT INVESTMENT TRUST 1.47%
................................................................................
Cathay Investment Fund 350,000 377,597
UTILITIES 5.07%
................................................................................
Guangdong Electric Power Development Co., Group B 158,000 93,385*
Hong Kong & China Gas Co. 278,405 540,714
Huaneng Power International, Inc. ADR 10,000 231,875*
Shandong Huaneng Power Company Ltd. ADR 63,100 433,813
----------
1,299,787
WATER TRANSPORTATION & SERVICES 4.82%
................................................................................
China International Marine Container, Group B 827,145 746,128
China Merchants Shekou Port Service Co., Ltd. 166,040 42,640
Continental Mariner Investment 440,000 163,247
Cosco Pacific Ltd. 200,000 162,602
Guangzhou Shipyard International Co., Class H 424,000 64,566
Pacific Ports Co. Ltd. 300,000 54,975*
Shenzhen Chiwan Wharf Holdings Ltd. 5,913 1,862
----------
1,236,020
................................................................................
TOTAL COMMON STOCKS AND WARRANTS 25,267,560
................................................................................
(cost $32,418,111)
PRINCIPAL
REPURCHASE AGREEMENT 1.98% AMOUNT
Joint Repurchase Agreement Account,
Prudential Securities, Inc.,
12/31/97, 6.60%, due 1/2/98,
repurchase price $507,864,
collateralized by U.S. Treasury
securities held in a joint repurchase
account (cost $507,678) $507,678 507,678
................................................................................
TOTAL INVESTMENTS 100.61% 25,775,238
................................................................................
(cost $32,925,789)
Other assets and liabilities, net (.61)% (155,224)
----------
NET ASSETS 100% $25,620,014
===========
See notes to portfolios of investments.
53
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS
AND WARRANTS 112.74% SHARES VALUE
CHEMICALS & ALLIED PRODUCTS 8.31%
................................................................................
Air Products & Chemicals 3,700 $304,325
Brunswick Technologies, Inc. 121,000 1,769,625*
---------
2,073,950
COPPER REFINING .00%
................................................................................
Cobre Mining Co., Warrants, Series A 13,333 0*
Cobre Mining Co., Warrants, Series B 13,333 0*
---------
0
GOLD & SILVER MINING 1.90%
................................................................................
Combined Metals Reduction Co. 535,000 0*
Fischer Watt Gold, Inc. 600,400 36,024*
Goldbeam Resources Ltd. + 300,000 0*
Meridian Gold, Inc. 118,000 330,289*
Star Resources Corp. 600,000 75,575*
Star Resources Corp., Special Warrants 290,000 31,049*
---------
472,937
INVESTMENT ADVISORS 4.96%
................................................................................
The Pioneer Group, Inc. 44,000 1,237,500
MANUFACTURING 0.15%
................................................................................
Kesoram Industries, GDR 62,500 36,352
METAL MINING 4.48%
................................................................................
Breakwater Resources Ltd. 240,000 688,569*
Minco Mining & Metals Corp., Warrants 25,000 0*
Osmium Holdings S.A 57,000 24,191*
Osmium Holdings S.A., Warrants 217 114*
Sutton Resources Ltd. 50,000 337,637*
Tenke Mining Corp., Warrants 7,500 0*
Zimasco Consolidated Enterprises Ltd. 40,000 69,080
---------
1,119,591
MINING SERVICES 3.33%
................................................................................
Dynatech Corp. 2,000,000 615,794*
Dynatech Corp., Warrants 500,000 11,371*
Major Drilling Group International, Inc. 12,000 205,731*
---------
832,896
NATURAL GAS PRODUCTION & DISTRIBUTION 2.37%
................................................................................
Eurogas Corp. 199,300 230,114*
Gazprom, ADR 15,000 361,875
---------
591,989
54
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS
AND WARRANTS SHARES VALUE
OIL & GAS EXTRACTION 36.32%
................................................................................
A & B Geoscience Corp. 150,000 $168,993*
Beau Canada Exploration, Class A 400,000 811,728*
Energy Africa Ltd., GDR 20,000 505,000*
Epic Energy (RS) 30,000 8,397*
Epic Energy, Warrants 150,000 0*
Falcon Drilling, Inc. 20,000 701,250*
Grey Wolf, Inc. 20,000 107,500*
Interaction Resources 710,300 352,901
Novus Petroleum Ltd. 106,873 278,618
Ocean Energy, Inc. 3,500 172,594*
Oil Search Ltd. 200,000 361,591
Pacalta Resources Ltd. 85,000 996,291*
Renata Resources, Inc. 1,400,000 1,253,980*
Reserve Royalty 127,600 383,947*
Reserve Royalty, Special Warrants 500,000 1,429,271*
Seven Seas Petroleum Corp. 30,000 516,000*
Tom Brown, Inc. 20,000 385,000*
Woodside Petroleum Co. 90,000 634,674
---------
9,067,735
OIL & GAS FIELD MACHINERY 4.73%
................................................................................
Cooper Cameron Corp. 10,000 610,000*
Prudential Steel Ltd. 58,200 570,169*
---------
1,180,169
OIL & GAS FIELD SERVICES 38.95%
................................................................................
BJ Services Corp. 7,000 503,563*
Bonus Resources Services Corp. 250,000 1,032,154*
Canadian Fracmaster Ltd. 129,800 1,907,421*
Diamond Offshore Drilling, Inc. 10,000 481,250
Ensco International, Inc. 37,600 1,259,600
Ensign Resource Service Group, Inc. 45,000 1,089,535*
Global Industries Ltd. 30,000 510,000*
Nabors Industries, Inc. 14,500 455,844*
Peak Energy Services Ltd., Special Warrants 50,000 174,592*
Plains Energy Services Ltd. 115,000 881,180*
Plains Energy Services Ltd., Special Warrants 40,000 291,187*
Precision Drilling Corp. 22,000 536,510*
Tuboscope, Inc. 25,000 601,563*
---------
9,724,399
PAPER PRODUCTS .00%
................................................................................
Lafayette Paper Mills Ltd. 600,000 0*
55
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS
AND WARRANTS SHARES VALUE
RAILROADS .91%
................................................................................
Illinois Central Corp., Class A 800 $ 27,250
Railink Ltd., Class A 25,000 201,183*
---------
228,433
TRANSPORTATION SERVICES 6.33%
................................................................................
CHC Helicopter Corp., Class A 100,000 724,257
Hvide Marine, Inc., Class A 25,000 643,750*
Offshore Logistics, Inc. 10,000 213,750*
---------
1,581,757
................................................................................
TOTAL COMMON STOCKS 28,147,708
................................................................................
(cost $29,191,905)
PRINCIPAL
REPURCHASE AGREEMENT .91% AMOUNT
Joint Repurchase Agreement Account,
Prudential Securities, Inc.,
12/31/97, 6.6%, due 1/2/98,
repurchase price $226,653,
collateralized by the U.S. Treasury
securities held in a joint
repurchase account (cost $226,653) $226,653 226,653
................................................................................
TOTAL INVESTMENTS 113.65% 28,374,361
................................................................................
(cost $29,531,619)
Other assets and liabilities, net (13.65)% (3,407,138)
---------
NET ASSETS 100% $24,967,223
===========
See notes to portfolios of investments.
56
<PAGE>
- --------------------------------------------------------------------------------
WORLD GOLD FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS
AND WARRANTS 92.17% SHARES VALUE
DIAMOND MINING & EXPLORATION .28%
................................................................................
Brazilian Resources, Inc., Units (RS) 1,200,000 $104,125*
Star Resources Corp. + 1,500,000 188,937*
Star Resources Corp., Special Warrants (RS) + 710,000 76,016*
---------
369,078
GOLD DEVELOPMENT 5.32%
................................................................................
Ancash Resources, Special Warrants (RS) + 800,000 377,873*
Canyon Resources Corp. 1,066,183 1,266,092*
Canyon Resources Corp., Warrants 166,667 0*
Chase Resource Corp. 100,000 10,496*
Chilean Gold Ltd. (RS) + 500,000 498,583*
Crown Resources Corp. 550,000 2,303,125*
Exploro Minerals Corp. Ltd. + 1,000,000 125,000*
Laguna Gold Co. 780,000 49,124*
Laguna Gold Co., Warrants 500,000 0*
Major Drilling Group International, Inc. 126,700 2,172,177*
Minorca Resources, Inc. 300,000 188,937*
Minorca Resources, Inc., Special Warrants 25,000 0*
---------
6,991,407
GOLD EXPLORATION 12.22%
................................................................................
Acacia Resources 1,000,000 912,450*
Argosy Mining Corp. 692,000 179,168*
Argosy Mining Corp., Warrants 110,000 0*
Birch Mountain Ltd., Warrants 50,000 0*
Bro X Minerals Ltd. 30,000 0*
Colony Pacific Explorations Ltd. 100,000 44,085*
Colony Pacific Explorations Ltd., Warrants 50,000 0*
Crown Butte Resources Ltd. 275,000 442,602*
Gold Corp. of Africa Ltd. (RS) 200,000 320,000*
Highlake Resources NL + 4,257,565 263,612*
Minefinders Corp. Ltd. 161,000 237,717*
Mink International Resources Corp. 380,000 98,387*
Miranda Mining, Private Placement (RS) 1,600,000 1,634,652*
Nevsun Resources 505,000 1,286,309*
Nevsun Resources, Special Warrants 25,000 0*
Normandy Mining Ltd. 2,644,848 2,568,432
Opawica Explorations, Inc. + 405,000 240,894*
Ormonde Mining plc + 2,750,000 316,152*
Orvana Minerals Corp. 240,000 327,490*
Otter Gold Mines Ltd. 500,000 342,169*
Ranger Minerals NL 2,000,000 4,301,550*
Solitario Resources Corp. 459,522 1,006,476*
Sutton Resources Ltd. 175,000 1,181,729*
Treminco Resources Ltd. 200,000 37,787*
Verena Minerals Corp. 300,000 52,482*
Western Exploration & Development,
Special Warrants (RS) + 600,000 255,000*
----------
16,049,143
57
<PAGE>
- --------------------------------------------------------------------------------
WORLD GOLD FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS
AND WARRANTS SHARES VALUE
GOLD PRODUCTION 27.79%
................................................................................
Agnico-Eagle Mines Ltd. 260,000 $1,413,750
Aurizon Mines Ltd. 690,000 376,614*
Cathedral Gold Corp. 590,000 70,186*
Dayton Mining Corp. 988,000 1,866,695*
Delta Gold, NL 8,900,000 9,373,729
Fischer Watt Gold Co., Inc. + 2,439,600 146,376*
Geomaque Explorations Ltd. 145,800 259,146*
Getchell Gold Corp. 270,860 6,500,640*
Greenstone Resources Ltd. 800,000 3,806,725*
IAMGOLD International African Mining 1,022,500 3,219,796*
IAMGOLD International African Mining, Units 120,000 377,873*
IAMGOLD International African Mining, Warrants 333,330 0*
Macraes Mining Co. Ltd. 750,000 493,701
Meridian Gold, Inc. 2,060,000 5,766,068*
Pacific Island Gold NL 2,000,000 130,350
Randgold Resources Ltd., ADR 50,000 250,000*
Rea Gold Corp. + 2,400,000 0*
Resolute Ltd. 1,935,669 1,412,961
Ross Mining NL 1,660,248 833,191
Vista Gold 834,300 192,659*
----------
36,490,460
INVESTMENT ADVISORS 11.65%
................................................................................
The Pioneer Group, Inc. 544,200 15,305,625
MAJOR GOLD PRODUCTION 15.71%
................................................................................
Ashanti Goldfields Co. Ltd., GDR 822,319 6,167,393
Ashanti Preference Stock 203,932 530,223*
Barrick Gold Corp. 590,000 10,988,750
Newmont Mining Corp. 100,000 2,937,500
----------
20,623,866
METAL MINING 2.71%
................................................................................
AMT International Mining Corp. + 2,328,500 1,205,759*
Boliden Ltd., Installment Receipts 25,000 63,854*
Dynatec Corp. 2,000,000 615,794*
Dynatec Corp., Warrants 500,000 11,371*
Osmium Holdings S.A 832,200 353,186*
Osmium Holdings S.A., Units 3,171 1,669*
Tenke Mining Corp. 385,000 697,771*
Tenke Mining Corp., Warrants 60,000 0*
Zimasco Consolidated Enterprises Ltd. 350,000 604,450
----------
3,553,854
58
<PAGE>
- --------------------------------------------------------------------------------
WORLD GOLD FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS
AND WARRANTS SHARES VALUE
MINERAL EXPLORATION & DEVELOPMENT .84%
................................................................................
Altoro Gold Corp. 250,000 $ 88,345*
Atacama Minerals Corp. 976,000 710,290*
Franc-Or Resources Corp. 497,900 205,564*
Panorama Resources NL 1,250,000 96,218*
Taseko Mines Ltd., Warrants 96,550 0*
Virginia Gold Mines, Inc., Warrants 125,000 0*
----------
1,100,417
MINING FINANCE 15.35%
................................................................................
Anglo American Platinum Corp. 50,000 667,831
Armada Gold Corp. 450,000 78,724*
Continental Precious Minerals, Inc. 200,000 104,965*
Euro Nevada Mining Corp. Ltd. 682,600 9,242,721
Euro-Nevada Mining Corp. Ltd., Warrants-1998,
Series A 60,000 944,683*
Euro-Nevada Mining Corp. Ltd., Warrants-1998,
Series B 35,000 281,656*
Franco-Nevada Mining Corp. Ltd. 440,000 8,651,902
Franco-Nevada Mining Corp. Ltd., Warrants 20,000 171,443*
New Venoro Gold Corp., Class A + 156,250 13,121*
----------
20,157,046
PRECIOUS & INDUSTRIAL METALS EXPLORATION .30%
................................................................................
Glencar Mining plc 872,438 394,033*
................................................................................
TOTAL COMMON STOCKS & WARRANTS 121,034,929
................................................................................
(cost $136,391,689)
OPTIONS .00%
GOLD EXPLORATION
................................................................................
Otter Gold Mines Ltd., Strike Price 2.75 NZD,
Expiration Oct. 2001 (premium $0) 50,000 2,281*
PRINCIPAL
CONVERTIBLE SECURITIES .10% AMOUNT
GOLD PRODUCTION
................................................................................
Macraes Mining Co. Ltd., 7% Convertible
Subordinated Note, due September 15, 1998
(cost $527,803) $250,000 131,979
59
<PAGE>
- --------------------------------------------------------------------------------
WORLD GOLD FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
REPURCHASE AGREEMENT 6.95%
Joint Repurchase Agreement Account, Prudential
Securities, Inc., 12/31/97, 6.6%
due 1/2/98, repurchase price $9,122,051,
collateralized by U.S. Treasury
securities held in a joint repurchase
account (cost $9,118,707) $9,118,707 $9,118,707
................................................................................
TOTAL INVESTMENTS 99.22% 130,287,896
................................................................................
(cost $146,038,199)
Other assets and liabilities, net .78% 1,023,536
---------
NET ASSETS 100% $131,311,432
============
See notes to portfolios of investments.
60
<PAGE>
- --------------------------------------------------------------------------------
GOLD SHARES FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS 65.07% SHARES VALUE
GOLD MINING - AFRICA 21.84%
................................................................................
Ashanti Goldfields, GDR 300,000 $2,250,000
Avgold Ltd. 1,163,268 876,807*
Avmin Ltd. 73,600 90,160
East Rand Gold & Uranium Ltd., ADR 312,781 359,698
Elandsrand Gold Mining Co. Ltd. 500,000 1,262,499
Evander Gold Mines 21,500 40,958
Evander Gold Mines Ltd., ADR 225,000 428,625
Free State Development & Investment Corp.
Ltd., ADR 504,000 168,840
Gencor Ltd. 350,000 568,753
Goldfields South Africa 50,000 773,576
H.J. Joel Mining Co. Ltd. 1,493,700 731,918
Harmony Gold Mining, ADR 160,000 359,999*
Oryx Gold Holdings Ltd. 1,800,000 1,115,989*
Randgold Resources Ltd. 59,000 295,000*
Southvaal Holdings Ltd., ADR 115,000 1,760,938
Sub Nigel Gold Mining Co. Ltd., ADR 1,003,000 25,075
Western Areas Gold Mining, ADR 617,803 3,336,136
----------
14,444,971
GOLD MINING - AUSTRALIA 12.79%
................................................................................
Acacia Resources 400,000 364,980*
Delta Gold NL 1,323,955 1,394,426
Great Central Mines 200,000 215,077
Lihir Gold Ltd. 1,000,000 1,042,800*
Normandy Mining Ltd. 2,970,369 2,884,548
Plutonic Resources Ltd. 400,000 1,115,796
Resolute Resources Ltd. 1,974,331 1,441,183
----------
8,458,810
GOLD MINING - NORTH AMERICA 13.31%
................................................................................
AMT International Mining Corp. 228,500 118,323*
Barrick Gold Corp. 2,500 46,562
Euro-Nevada Mining Corp. Ltd. 120,000 1,624,856
Franco-Nevada Mining Corp. Ltd. 35,000 688,220
Getchell Gold Corp. 5,600 134,400*
Homestake Mining 9,780 86,798
Kinross Gold Corp. 50,000 171,875*
Meridian Gold, Inc. 2,060,000 5,766,068*
Newmont Mining Corp. 1,000 29,375
Placer Dome, Inc. 8,000 101,500
TVX Gold Corp. 10,000 33,750*
----------
8,801,727
61
<PAGE>
- --------------------------------------------------------------------------------
GOLD SHARES FUND
PORTFOLIO OF INVESTMENTS December 31, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS SHARES VALUE
INVESTMENT ADVISORS 12.76%
................................................................................
The Pioneer Group, Inc. 300,000 $8,437,500
MINING SERVICES 3.59%
................................................................................
Dynatec Corp. 2,000,000 615,794*
Dynatec Corp. Warrants 500,000 11,370*
Major Drilling Group International 101,700 1,743,571*
-----------
2,370,735
OTHER MINERAL MINING 0.78%
................................................................................
Ocean Diamond Mining Holdings Ltd. 500,000 513,716*
...............................................................................
TOTAL COMMON STOCKS 43,027,459
...............................................................................
(cost $74,414,132)
PRINCIPAL
REPURCHASE AGREEMENT 34.38% AMOUNT
Joint Repurchase Agreement Accounts,
12/31/97, due 1/2/98,
collateralized by U.S. Treasury
securities held in joint repurchase
accounts:
6.6%, Prudential Securities,
Inc., repurchase price $11,004,033 $ 11,000,000 11,000,000
6.5%, Donaldson, Lufkin & Jenrette,
Inc., repurchase price $11,735,996 11,731,760 11,731,760
...............................................................................
TOTAL REPURCHASE AGREEMENTS 22,731,760
...............................................................................
(cost $22,731,760)
...............................................................................
TOTAL INVESTMENTS 99.45% 65,759,219
...............................................................................
(cost $97,145,892)
Other assets and liabilities, net 0.55% 362,008
-----------
NET ASSETS 100% $66,121,227
===========
See notes to portfolios of investments.
62
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIOS OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
LEGEND
* - Non-income producing security GO - General Obligation Bond
+ - Affiliated company (see below) RS - Restricted Security (see below)
ADR - American Depository Receipt WI - When Issued Security
GDR - Global Depository Receipt
GENERAL
The yields reflect the yield to maturity as of December 31, 1997. Variable Rate
Notes have periodic reset features which effectively shorten the maturity dates
and reset the interest rates as tied to various interest bearing instruments.
63
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIOS OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
AFFILIATED COMPANIES - INDICATED IN PORTFOLIO OF INVESTMENTS AS "+"
The Investment Company Act of 1940 defines affiliates as companies in which the
Fund owns at least 5% of the outstanding voting securities. The following is a
summary of transactions with each affiliated company during the period ended
December 31, 1997:
SHARES OF AFFILIATED COMPANIES
------------------------------
SECURITY JUNE 30, 1997 ADDITIONS REDUCTIONS DEC.31, 1997
------------- --------- ---------- ------------
GLOBAL RESOURCES
................................................................................
Goldbeam Resources Ltd. 300,000 -- -- 300,000
At December 31, 1997, the value of investments in affiliated companies was $0
and the total cost was $765,345. There were no transactions with the affiliate.
WORLD GOLD FUND
................................................................................
AMT International
Mining Corp. 2,650,000 -- 321,500 2,328,500
Ancash Resources (RS) 800,000 -- -- 800,000
Chilean Gold Ltd. (RS) 500,000 -- -- 500,000
Crown Resources Corp. 742,500 -- 192,500 550,000(a)
Exploro Minerals Corp. Ltd. 1,000,000 -- -- 1,000,000
Fischer-Watt Gold
Company, Inc. 831,700 2,400,000 792,100 2,439,600
Fischer-Watt Gold
Company, Inc. (RS) 1,856,860 543,140 2,400,000 0
Highlake Resources NL 2,857,565 1,400,000 -- 4,257,565
New Venoro Gold Corp.,
Class A -- 156,250 -- 156,250
Opawica Exploration Inc. 405,000 -- -- 405,000
Ormonde Mining plc 2,750,000 -- -- 2,750,000
Rea Gold Corp. 2,500,000 -- 100,000 2,400,000
Star Resources Corp. 2,210,000 -- -- 2,210,000
Venoro Gold Corp.,
Class A 550,000 350,000 1,250,000 0
Western Exploration &
Development Ltd. (RS) -- 600,000 -- 600,000
At December 31, 1997, the value of investments in affiliated companies was
$3,442,370, representing 2.62% of net assets and the total cost was $10,178,805.
Net realized gains on transactions with affiliates were $172,991 and there was
no income earned for the period.
64
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIOS OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
Affiliated Companies (cont'd)
SHARES OF AFFILIATED COMPANIES
------------------------------
SECURITY JUNE 30, 1997 ADDITIONS REDUCTIONS DEC.31, 1997
------------- --------- ---------- ------------
GOLD SHARES
................................................................................
Sub Nigel Gold
Mining Co. Ltd, ADR 1,354,600 -- 351,600 1,003,000(a)
At December 31, 1997, there were no investments in affiliated companies. Net
realized losses on transactions with affiliates were $(974,343). Income earned
for the period was $8,424.
- ----------------------
(a) At December 31, 1997, the company is no longer defined as an affiliate,
although it was affiliated during the year.
65
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIOS OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
RESTRICTED SECURITIES - INDICATED IN PORTFOLIO OF INVESTMENTS AS "RS"
The following securities are subject to legal restrictions on their resale. The
issuer bears the costs of registration, if any, involved in the disposition of
these securities. For securities acquired during the period, the market price,
if applicable, of the unrestricted security on agreement date and on enforceable
date are shown.
PRICE OF UNRESTRICTED
SECURITY ON:
---------------------
ACQUISITION COST PER AGREEMENT ENFORCEABLE
SECURITY DATE SHARE DATE DATE
GLOBAL RESOURCES
................................................................................
COMMON STOCK
Epic Energy, Inc 11/06/96 $0.30 * -- --
SPECIAL WARRANTS & UNITS
................................................................................
Plains Energy Services Ltd. 09/24/97 $8.65 $13.00 $ 13.00
Reserve Royalty 10/24/97 $2.73 $4.10 $ 4.10
Star Resources Corp. 06/27/97 $0.15 -- --
At December 31, 1997, the total cost of restricted securities was $1,760,519 and
the total value was $1,759,903, representing 7.05% of net assets.
WORLD GOLD
................................................................................
COMMON STOCK
Chilean Gold Ltd. 01/17/97 $1.10 -- --
Gold Corporation of Africa Ltd. 08/16/96 $2.00 -- --
Miranda Mining Development Corp. 03/25/96 $1.13 -- --
SPECIAL WARRANTS & UNITS
Ancash Resources 10/01/96 $0.73 -- --
Brazilian Resources, Inc 03/03/97 $0.33 -- --
Star Resources Corp., Special 06/27/97 $0.15 -- --
Western Exploration & Developmen 08/14/97 $0.50 -- --
At December 31, 1997, the total cost of restricted securities was $3,994,207 and
the total value was $3,266,249, representing 2.49% of net assets.
* Acquired through exercise of warrant or conversion of unit.
66
<PAGE>
[BLANK PAGE]
67
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. U.S.
TREASURY GOVERNMENT ALL
SECURITIES SECURITIES NEAR-TERM AMERICAN
CASH SAVINGS TAX FREE TAX FREE INCOME EQUITY
<S> <C> <C> <C> <C> <C> <C>
Investments, at identified cost $179,630,352 $720,979,463 $ 7,456,421 $ 20,495,263 $ 8,602,087 $17,686,043
============ ============ =========== ============ ============ ===========
ASSETS
....................................................................................................................................
Investments, at value $179,630,352 $720,979,463 $ 7,596,442 $ 21,314,407 $ 10,728,555 $27,852,276
Cash -- 472 1 4 7 30,001
Receivables:
Investments sold 101,690,999 42,289,000 193,300 1,359,770 803,502 4,279,166
Dividends -- -- -- -- 30,681 36,598
Interest 1,240,229 7,918,222 128,688 347,850 4,432 1,476
Capital shares sold 2,294,931 2,779,972 300 609 3,373 8,594
From manager -- 281,912 13,941 16,918 -- 20,401
Other assets 214,222 47,652 2,871 2,890 2,963 2,713
....................................................................................................................................
TOTAL ASSETS 285,070,733 774,296,693 7,935,543 23,042,448 11,573,513 32,231,225
....................................................................................................................................
LIABILITIES
....................................................................................................................................
Payables:
Investments purchased 84,485,751 40,480,368 184,001 2,446,788 812,306 4,183,786
Capital shares redeemed 17,980,840 542,670 9,600 2,946 -- 193,386
To manager and affiliates 59,878 -- -- -- 6,811 --
Dividends and distributions 43,394 210,084 29,563 90,443 1,450,840 450,530
Accounts payable and accrued expenses 129,858 134,897 8,649 8,686 9,748 19,371
....................................................................................................................................
TOTAL LIABILITIES 102,699,721 41,368,019 231,813 2,548,863 2,279,705 4,847,073
....................................................................................................................................
NET ASSETS $182,371,012 $732,928,674 $ 7,703,730 $ 20,493,585 $ 9,293,808 $27,384,152
============ ============ =========== ============ ============ ===========
NET ASSETS CONSIST OF:
....................................................................................................................................
Paid in capital $182,318,972 $733,026,534 $ 7,742,148 $ 19,739,031 $ 7,177,360 $16,892,262
Undistributed net investment income 30,940 1,675,236 33,582 44,666 41,135 82,136
Accumulated net realized gain (loss)
on investments 21,100 (1,773,096) (212,021) (109,256) (51,155) 243,521
Net unrealized appreciation
(depreciation) of investments -- -- 140,021 819,144 2,126,468 10,166,233
------------ ------------ ----------- ------------ ------------ -----------
Net assets applicable to capital
shares outstanding $182,371,012 $732,928,674 $ 7,703,730 $ 20,493,585 $ 9,293,808 $27,384,152
============ ============ =========== ============ ============ ===========
Capital shares outstanding,
an unlimited number of no
par shares authorized 182,372,880 732,972,244 721,064 1,674,868 664,000 826,660
============ ============ =========== ============ ============ ===========
NET ASSET VALUE, PER SHARE $ 1.00 $ 1.00 $ 10.68 $ 12.24 $ 14.00 $ 33.13
============ ============ =========== ============ ============ ===========
</TABLE>
See accompanying notes to financial statements.
68 and 69
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CHINA
REAL REGION GLOBAL WORLD GOLD
ESTATE OPPORTUNITY RESOURCES GOLD SHARES
<S> <C> <C> <C> <C> <C>
Investments, at identified cost $13,296,619 $ 32,925,789 $ 29,531,619 $ 146,038,199 $ 97,145,892
=========== ============ ============ ============= =============
ASSETS
....................................................................................................................................
Investments, at value $16,675,867 $ 25,775,238 $ 28,374,361 $ 130,287,896 $ 65,759,219
Cash 84,202 2,146 222,909 187,471 48,954
Receivables:
Investments sold 1,685,481 606,357 808,826 6,387,913 10,423,825
Dividends 98,055 47,917 8,996 333,403 116,338
Interest 644 189 83 4,546 8,278
Capital shares sold 180,591 93,542 140,695 6,835,531 15,188,795
From manager -- -- -- -- --
Other assets 2,811 4,843 1,820 8,955 8,078
....................................................................................................................................
TOTAL ASSETS 18,727,651 26,530,232 29,557,690 144,045,715 91,553,487
....................................................................................................................................
Investments purchased 1,838,113 507,678 402,170 9,695,703 22,848,002
Capital shares redeemed 4,933 135,535 355,397 1,145,335 1,003,019
To manager and affiliates 10,749 29,869 21,839 109,071 49,057
Dividends and distributions 573,497 207,617 3,781,393 1,637,556 1,401,400
Accounts payable and accrued expenses 3,587 29,519 29,668 146,618 130,782
....................................................................................................................................
TOTAL LIABILITIES 2,430,879 910,218 4,590,467 12,734,283 25,432,260
....................................................................................................................................
NET ASSETS $16,296,772 $ 25,620,014 $ 24,967,223 $ 131,311,432 $ 66,121,227
=========== ============ ============ ============= =============
NET ASSETS CONSIST OF:
....................................................................................................................................
Paid in capital $12,776,136 $ 37,240,803 $ 26,000,760 $ 194,033,548 $ 285,404,984
Undistributed net investment
income (loss) 64,205 (22,296) (289,847) (244,989) 1,618,523
Accumulated net realized gain (loss)
on investments and foreign currencies 74,838 (4,447,921) 413,572 (46,685,708) (189,515,420)
Net unrealized appreciation
(depreciation) of investments and other
assets and liabilities denominated
in foreign currencies 3,381,593 (7,150,572) (1,157,262) (15,791,419) (31,386,860)
----------- ------------ ------------ ------------- -------------
Net assets applicable to capital
shares outstanding $16,296,772 $ 25,620,014 $ 24,967,223 $ 131,311,432 $ 66,121,227
=========== ============ ============ ============= =============
Capital shares outstanding,
an unlimited number of no
par shares authorized 1,048,441 4,417,376 4,178,335 11,780,977 116,783,296
=========== ============ ============ ============= =============
NET ASSET VALUE, PER SHARE $ 15.54 $ 5.80 $ 5.98 $ 11.15 $ 0.57
=========== ============ ============ ============= =============
</TABLE>
See accompanying notes to financial statements.
70 and 71
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS For the Six Months Ended December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. U.S.
TREASURY GOVERNMENT ALL
SECURITIES SECURITIES NEAR-TERM AMERICAN
CASH SAVINGS TAX FREE TAX FREE INCOME EQUITY
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
INCOME:
....................................................................................................................................
Dividends $ -- $ -- $ -- $ -- $ 176,442 $ 178,839
Foreign taxes withheld on dividends -- -- -- -- -- (37)
----------- ------------ --------- ----------- ----------- ----------
Net dividends -- -- -- -- 176,442 178,802
Interest and other 5,356,850 20,125,214 186,857 538,202 21,326 116,124
----------- ------------ --------- ----------- ----------- ----------
TOTAL INCOME 5,356,850 20,125,214 186,857 538,202 197,768 294,926
EXPENSES:
....................................................................................................................................
Management fee 471,592 1,484,939 19,166 72,720 37,414 101,486
Transfer agent fees and expenses 183,270 404,094 5,574 17,508 20,912 43,347
Accounting service fees and expenses 56,064 112,646 19,837 21,475 19,814 20,697
Legal and professional fees 36,299 119,206 4,673 6,622 5,064 8,737
Custodian fees 76,485 64,171 2,497 4,061 4,754 11,428
Shareholder reporting 17,582 38,975 579 1,789 2,333 5,829
Registration fees 32,395 60,018 6,632 9,306 9,054 13,827
Trustee's fees and expenses 17,580 55,784 1,510 2,450 3,225 2,939
Miscellaneous 61,022 96,673 2,954 4,929 2,077 6,000
----------- ------------ --------- ----------- ----------- ----------
Total expenses before reductions 952,289 2,436,506 63,422 140,860 104,647 214,290
Short-term trading fee -- -- -- -- (50) (793)
Expenses offset (1,250) (14,212) (17) (31) (131) (602)
Expenses reimbursed -- (1,331,261) (36,207) (71,885) -- (77,271
----------- ------------ --------- ----------- ----------- ----------
NET EXPENSES 951,039 1,091,033 27,198 68,944 104,466 135,624
....................................................................................................................................
NET INVESTMENT INCOME 4,405,811 19,034,181 159,659 469,258 93,302 159,302
....................................................................................................................................
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Realized gain (loss) from:
Securities 21,100 (439) 18,099 75,349 34,308 541,471
----------- ------------ --------- ----------- ----------- ----------
Net realized gain (loss) 21,100 (439) 18,099 75,349 34,308 541,471
----------- ------------ --------- ----------- ----------- ----------
Unrealized appreciation (depreciation) of:
Investments -- -- 121,384 471,497 1,022,998 1,237,244
----------- ------------ --------- ----------- ----------- ----------
Net unrealized appreciation (depreciation) -- -- 121,384 471,497 1,022,998 1,237,244
....................................................................................................................................
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS 21,100 (439) 139,483 546,846 1,057,306 1,778,715
....................................................................................................................................
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 4,426,911 $ 19,033,742 $ 299,142 $ 1,016,104 $ 1,150,608 $1,938,017
=========== ============ ========= =========== =========== ==========
</TABLE>
72 and 73
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS For the Six Months Ended December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CHINA
REAL REGION GLOBAL WORLD GOLD
ESTATE OPPORTUNITY RESOURCES GOLD SHARES
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
INCOME:
....................................................................................................................................
Dividends $ 369,651 $ 337,068 $ 77,681 $ 542,873 $ 1,054,250
Foreign taxes withheld on dividends (286) -- (958) (7,680) (1,148)
----------- ------------ ----------- ------------ ------------
Net dividends 369,365 337,068 76,723 535,193 1,053,102
Interest and other 17,959 104,431 20,232 175,230 543,609
----------- ------------ ----------- ------------ ------------
TOTAL INCOME 387,324 441,499 96,955 710,423 1,596,711
EXPENSES:
....................................................................................................................................
Management fee 56,701 239,121 181,235 832,689 362,431
Transfer agent fees and expenses 26,918 96,738 100,990 350,129 532,879
Accounting service fees and expenses 19,188 59,856 45,466 97,530 52,359
Legal and professional fees 6,836 11,056 11,189 38,307 20,793
Custodian fees 6,762 11,976 22,009 15,884 60,048
Shareholder reporting 3,038 9,931 11,133 35,704 59,970
Registration fees 11,210 10,622 11,966 16,832 18,150
Trustee's fees and expenses 3,567 5,525 5,354 14,163 10,712
Amortization of organizational costs -- 1,468 -- -- --
Miscellaneous 1,201 15,260 8,603 58,348 16,303
----------- ------------ ----------- ------------ ------------
Total expenses before reductions 135,421 461,553 397,945 1,459,586 1,133,645
Short-term trading fee (2,598) (176) (1,196) (3,352) (323,927)
Expenses offset -- (379) (10,159) (181) (4,733)
Expenses reimbursed -- -- -- -- --
----------- ------------ ----------- ------------ ------------
NET EXPENSES 132,823 460,998 386,590 1,456,053 804,985
....................................................................................................................................
NET INVESTMENT INCOME (LOSS) 254,501 (19,499) (289,635) (745,630) 791,726
....................................................................................................................................
NETREALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Realized gain (loss) from:
Securities 326,824 237,734 3,605,547 122,251 (28,157,093)
Foreign currency transactions (114) (567) (4,958) (32,829) (64,483)
----------- ------------ ----------- ------------ ------------
Net realized gain (loss) 326,710 237,167 3,600,589 89,422 (28,221,576)
----------- ------------ ----------- ------------ ------------
Unrealized appreciation (depreciation) of:
Investments 1,220,413 (13,179,941) (6,327,002) (52,963,522) 2,098,605
Other assets and liabilities denominated
in foreign currencies 2,345 28,764 380 (32,827) (1,128)
----------- ------------ ----------- ------------ ------------
Net unrealized appreciation (depreciation) 1,222,758 (13,151,177) (6,326,622) (52,996,349) 2,097,477
....................................................................................................................................
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS 1,549,468 (12,914,010) (2,726,033) (52,906,927) (26,124,099)
....................................................................................................................................
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 1,803,969 $(12,933,509) $(3,015,668) $(53,652,557) $(25,332,373)
=========== ============ =========== ============ ============
</TABLE>
See accompanying notes to financial statements.
74 and 75
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. TREASURY U.S. GOVERNMENT
SECURITIES CASH SECURITIES SAVINGS NEAR-TERM TAX FREE
--------------------------------- ----------------------------- --------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30,
1997 1997 1997 1997 1997 1997
--------------- --------------- ------------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
....................................................................................................................................
Net investment income (loss) $ 4,405,811 $ 6,979,897 $ 19,034,181 $ 33,135,180 $ 159,659 $ 301,963
Net realized gain (loss) 21,100 -- (439) 9,340 18,099 9,354
Net unrealized appreciation
(depreciation) -- -- -- -- 121,384 52,103
--------------- --------------- ------------- ------------- ----------- -----------
NET INCREASE IN NET ASSETS
FROM INVESTMENT OPERATIONS 4,426,911 6,979,897 19,033,742 33,144,520 299,142 363,420
DISTRIBUTIONS TO SHAREHOLDERS:
....................................................................................................................................
From net investment income (4,427,034) (6,979,895) (19,026,174) (33,144,634) (159,588) (301,300)
From net capital gains -- -- -- -- -- --
--------------- --------------- ------------- ------------- ----------- -----------
TOTAL DISTRIBUTIONS TO
SHAREHOLDERS (4,427,034) (6,979,895) (19,026,174) (33,144,634) (159,588) (301,300)
FROM CAPITAL SHARE TRANSACTIONS:
....................................................................................................................................
Proceeds from shares sold 1,890,359,582 4,905,311,931 327,461,876 649,752,926 1,235,894 4,278,905
Distributions reinvested 4,335,387 6,949,861 18,808,596 33,129,743 113,437 243,513
--------------- --------------- ------------- ------------- ----------- -----------
1,894,694,969 4,912,261,792 346,270,472 682,882,669 1,349,331 4,522,418
Cost of shares redeemed (1,944,206,065) (4,869,223,284) (305,118,671) (579,521,813) (1,145,110) (3,769,377)
--------------- --------------- ------------- ------------- ----------- -----------
NET INCREASE (DECREASE) IN
NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS (49,511,096) 43,038,508 41,151,801 103,360,856 204,221 753,041
....................................................................................................................................
NET INCREASE (DECREASE)
IN NET ASSETS (49,511,219) 43,038,510 41,159,369 103,360,742 343,775 815,161
....................................................................................................................................
NET ASSETS
Beginning of period 231,882,231 188,843,721 691,769,305 588,408,563 7,359,955 6,544,794
....................................................................................................................................
END OF PERIOD $ 182,371,012 $ 231,882,231 $ 732,928,674 $ 691,769,305 $ 7,703,730 $ 7,359,955
....................................................................................................................................
Undistributed net investment
income, end of period $ 30,940 $ 52,163 $ 1,675,236 $ 1,667,229 $ 33,582 $ 33,511
--------------- --------------- ------------- ------------- ----------- -----------
CAPITAL SHARE ACTIVITY
Shares sold 1,890,359,441 4,905,311,902 327,461,460 649,751,804 116,680 408,508
Shares reinvested 4,335,387 6,949,861 18,808,596 33,129,743 10,703 23,316
Shares redeemed (1,944,206,065) (4,869,221,951) (305,118,672) (579,521,813) (107,925) (360,674)
--------------- --------------- ------------- ------------- ----------- -----------
NET SHARE ACTIVITY (49,511,237) 43,039,812 41,151,384 103,359,734 19,458 71,150
=============== =============== ============= ============= =========== ===========
</TABLE>
See accompanying notes to financial statements.
76 and 77
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TAX FREE INCOME ALL AMERICAN EQUITY
---------------------------- -------------------------- ----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30,
1997 1997 1997 1997 1997 1997
------------ ------------ ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
...................................................................................................................................
Net investment income (loss) $ 469,258 $ 941,518 $ 93,302 $ 203,475 $ 159,302 $ 269,627
Net realized gain (loss) 75,349 (38,538) 34,308 1,752,977 541,471 281,397
Net unrealized appreciation
(depreciation) 471,497 534,837 1,022,998 (593,053) 1,237,244 4,872,127
------------ ------------ ----------- ----------- ------------ ------------
NET INCREASE (DECREASE) IN
NET ASSETS FROM INVESTMENT
OPERATIONS 1,016,104 1,437,817 1,150,608 1,363,399 1,938,017 5,423,151
DISTRIBUTIONS TO SHAREHOLDERS:
...................................................................................................................................
From net investment income (461,677) (938,596) (72,675) (173,113) (76,206) (291,937)
From net capital gains -- -- (1,426,272) (1,400,898) (450,529) (511,031)
------------ ------------ ----------- ----------- ------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (461,677) (938,596) (1,498,947) (1,574,011) (526,735) (802,968)
FROM CAPITAL SHARE TRANSACTIONS:
...................................................................................................................................
Proceeds from shares sold 5,126,520 9,028,653 2,732,191 2,905,625 13,871,227 16,746,661
Distributions reinvested 293,462 760,035 44,955 1,473,596 66,616 759,303
Paid-in capital portion of
short-term trading fee -- -- 1,307 -- 5,828 113
------------ ------------ ----------- ----------- ------------ ------------
5,419,982 9,788,688 2,778,453 4,379,221 13,943,671 17,506,077
Cost of shares redeemed (3,808,231) (11,909,505) (2,751,155) (4,251,783) (13,449,173) (11,868,167)
------------ ------------ ----------- ----------- ------------ ------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS 1,611,751 (2,120,817) 27,298 127,438 494,498 5,637,910
...................................................................................................................................
NET INCREASE (DECREASE)
IN NET ASSETS 2,166,178 (1,621,596) (321,041) (83,174) 1,905,780 10,258,093
...................................................................................................................................
NET ASSETS
Beginning of period 18,327,407 19,949,003 9,614,849 9,698,023 25,478,372 15,220,279
...................................................................................................................................
END OF PERIOD $ 20,493,585 $ 18,327,407 $ 9,293,808 $ 9,614,849 $ 27,384,152 $ 25,478,372
...................................................................................................................................
Undistributed net investment
income, end of period $ 44,666 $ 37,085 $ 41,135 $ 20,508 $ 82,136 $ (960)
------------ ------------ ----------- ----------- ------------ ------------
CAPITAL SHARE ACTIVITY
...................................................................................................................................
Shares sold 424,114 768,737 178,640 203,876 422,413 595,950
Shares reinvested 24,300 64,725 2,948 110,120 2,025 28,750
Shares redeemed (315,179) (1,014,702) (181,019) (299,586) (410,644) (431,873)
------------ ------------ ----------- ----------- ------------ ------------
NET SHARE ACTIVITY 133,235 (181,240) 569 14,410 13,794 192,827
============ ============ =========== =========== ============ ============
</TABLE>
See accompanying notes to financial statements.
78 and 79
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
REAL ESTATE CHINA REGION OPPORTUNITY GLOBAL RESOURCES
---------------------------- ---------------------------- ----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30,
1997 1997 1997 1997 1997 1997
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
..................................................................................................................................
Net investment income (loss) $ 254,501 $ 427,610 $ (19,499) $ 243,278 $ (289,635) $ (214,044)
Net realized gain (loss) 326,710 1,242,646 237,167 631,700 3,600,589 923,955
Net unrealized appreciation
(depreciation) 1,222,758 1,659,405 (13,151,177) 7,293,867 (6,326,622) 3,708,651
------------ ------------ ------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN
NET ASSETS FROM INVESTMENT
OPERATIONS 1,803,969 3,329,661 (12,933,509) 8,168,845 (3,015,668) 4,418,562
DISTRIBUTIONS TO SHAREHOLDERS:
..................................................................................................................................
From net investment income (295,660) (342,360) (207,619) (92,833) -- (142,583)
In excess of net investment income -- -- -- -- -- (3,778)
From net capital gains (277,837) -- -- -- (3,781,393) (3,293,334)
------------ ------------ ------------ ------------ ------------ ------------
TOTAL DISTRIBUTIONS TO
SHAREHOLDERS (573,497) (342,360) (207,619) (92,833) (3,781,393) (3,439,695)
FROM CAPITAL SHARE TRANSACTIONS:
..................................................................................................................................
Proceeds from shares sold 8,370,288 30,297,759 22,954,392 34,873,032 23,272,576 27,452,394
Distributions reinvested -- 324,421 -- 89,879 -- 3,089,881
Paid-in capital portion of
short-term trading fee -- 3,697 176,105 144,774 15,052 10,465
------------ ------------ ------------ ------------ ------------ ------------
8,370,288 30,625,877 23,130,497 35,107,685 23,287,628 30,552,740
Cost of shares redeemed (7,200,844) (27,936,336) (26,468,368) (22,051,958) (21,506,713) (26,082,216)
------------ ------------ ------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN
NET ASSETS FROM CAPITAL SHARE
TRANSACTIONS 1,169,444 2,689,541 (3,337,871) 13,055,727 1,780,915 4,470,524
..................................................................................................................................
NET INCREASE (DECREASE) IN
NET ASSETS 2,399,916 5,676,842 (16,478,999) 21,131,739 (5,016,146) 5,449,391
..................................................................................................................................
NET ASSETS
Beginning of period 13,896,856 8,220,014 42,099,013 20,967,274 29,983,369 24,533,978
..................................................................................................................................
END OF PERIOD $ 16,296,772 $ 13,896,856 $ 25,620,014 $ 42,099,013 $ 24,967,223 $ 29,983,369
..................................................................................................................................
Undistributed net investment
income, end of period $ 64,205 $ 105,364 $ (22,296) $ 204,822 $ (289,847) $ (212)
============ ============ ============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Shares sold 536,608 2,314,927 2,890,857 4,590,966 2,679,553 3,747,347
Shares reinvested -- 23,230 -- 14,132 -- 436,424
Shares redeemed (465,351) (2,110,101) (3,370,878) (2,966,726) (2,589,632) (3,609,089)
------------ ------------ ------------ ------------ ------------ ------------
Net share activity 71,257 228,056 (480,021) 1,638,372 89,921 574,682
============ ============ ============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
80 and 81
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WORLD GOLD GOLD SHARES
------------------------------ ----------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30,
1997 1997 1997 1997
------------- ------------- --------------- ---------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
...................................................................................................................
Net investment income (loss) $ (745,630) $ (1,434,880) $ 791,726 $ 4,191,765
Net realized gain (loss) 89,422 9,541,590 (28,221,576) (43,691,058)
Net unrealized appreciation (depreciation) (52,996,349) (58,479,164) 2,097,477 (23,588,796)
------------- ------------- --------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS (53,652,557) (50,372,454) (25,332,373) (63,088,089)
DISTRIBUTIONS TO SHAREHOLDERS:
...................................................................................................................
From net investment income (1,637,556) (13,061,240) (1,401,400) (5,265,799)
From net capital gains -- -- -- --
------------- ------------- --------------- ---------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (1,637,556) (13,061,240) (1,401,400) (5,265,799)
FROM CAPITAL SHARE TRANSACTIONS:
...................................................................................................................
Proceeds from shares sold 257,616,014 525,463,040 1,612,398,579 4,140,600,024
Distributions reinvested -- 12,024,924 -- 4,884,235
Paid-in capital portion of
short-term trading fee 492,457 823,646 3,572,004 9,317,558
------------- ------------- --------------- ---------------
258,108,471 538,311,610 1,615,970,583 4,154,801,817
Cost of shares redeemed (258,972,811) (536,193,421) (1,602,638,377) (4,160,764,515)
------------- ------------- --------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS (864,340) 2,118,189 13,332,206 (5,962,698)
...................................................................................................................
NET INCREASE (DECREASE) IN NET ASSETS (56,154,453) (61,315,505) (13,401,567) (74,316,586)
...................................................................................................................
NET ASSETS
Beginning of period 187,465,885 248,781,390 79,522,794 153,839,380
...................................................................................................................
END OF PERIOD $ 131,311,432 $ 187,465,885 $ 66,121,227 $ 79,522,794
...................................................................................................................
Undistributed net investment income,
end of period $ (244,989) $ 500,641 $ 1,618,523 $ 826,797
============= ============= =============== ===============
CAPITAL SHARE ACTIVITY
...................................................................................................................
Shares sold 18,690,722 26,738,670 1,999,007,466 2,897,102,803
Shares reinvested -- 627,606 -- 4,125,689
Shares redeemed (18,660,003) (27,393,631) (1,967,058,268) (2,900,033,745)
------------- ------------- --------------- ---------------
NET SHARE ACTIVITY 30,719 (27,355) 31,949,198 1,194,747
============= ============= =============== ===============
</TABLE>
See accompanying notes to financial statements.
82 and 83
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997
- --------------------------------------------------------------------------------
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES
U.S. Global Investors Funds (the "Trust"), consisting of eleven separate funds
(the "Funds"), is organized as a Massachusetts business trust. Each Fund is a
diversified, open-end management investment company registered under the
Investment Company Act of 1940. The U.S. prefix is omitted throughout the notes
to financial statements.
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
policies are in conformity with generally accepted accounting principles.
A. SECURITY VALUATIONS
The Funds value investments traded on national or international securities
exchanges or over-the-counter at the last sales price reported by the security's
primary exchange at the time of daily valuation. Securities for which no sale
was reported are valued at the mean between the last reported bid and asked
prices. Short-term investments with effective maturities of sixty days or less
at the date of purchase and investments of Treasury Securities Cash and
Government Securities Savings Funds are valued at amortized cost, which
approximates market value. An independent pricing service values municipal
securities and long-term U.S. Government obligations using a system based on
such factors as credit rating, maturity, coupon and type of security to
determine fair value.
B. SECURITIES VALUED BY THE TRUSTEES
The trustees determine fair value for securities when market quotations are not
available or the security is subject to legal restrictions on resale. The
following factors are considered in determining fair value: nature and duration
of restrictions, trading volume, market values of unrestricted shares of the
same or similar class, investment management's judgment regarding the market
experience of the issuer, financial status and other operational and market
factors affecting the issuer, issuer's management, quality of the underlying
property based on review of independent geological studies, the extent of the
Fund's investment in the trading securities of the issuer, and other relevant
matters.
84
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997
- --------------------------------------------------------------------------------
C. SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for on trade date. Realized gains and losses
from security transactions are determined on an identified-cost basis. Dividend
income is recorded on the ex- dividend date or, for certain foreign securities,
when the information becomes available to the Funds. Interest income is recorded
on an accrual basis. Discounts and premiums on securities purchased are accreted
and amortized, respectively, on the same basis as used for federal tax
reporting.
The Funds may purchase securities on a when-issued or delayed-delivery basis and
segregate on their books sufficient liquid assets to collateralize the
obligation until settlement. The investment is accounted for in the same manner
as marketable portfolio securities.
D. REPURCHASE AGREEMENTS
The Funds may enter into repurchase agreements with recognized financial
institutions or registered broker-dealers and, in all instances, hold, as
collateral underlying securities with a value exceeding the total repurchase
price, including accrued interest. The Funds use joint repurchase agreement
accounts with other Funds under comon management where uninvested cash is
collectively invested in repurchase agreements and each participating Fund owns
an undivided interest in the account.
E. OPTIONS
Some Funds may write or purchase options on securities. The option premium is
the basis for recognition of unrealized or realized gain or loss on the option.
The cost of securities acquired or the proceeds from securities sold through the
exercise of the option is adjusted by the amount of the premium. There was no
activity in options written or purchased during the period.
F. FOREIGN CURRENCY TRANSACTIONS
Some Funds may invest in securities of foreign issuers. The accounting records
of these Funds are maintained in U.S. dollars. At each net asset value
determination date, the value of assets and liabilities denominated in foreign
currencies are translated into U.S. dollars using the current exchange rate.
Security transactions, income and expenses are converted at the prevailing rate
of exchange on the date of the event. The effect of changes in foreign exchange
rates on foreign denominated securities is included with the net realized and
unrealized gain or loss on securities. Other foreign currency gains or losses
are reported separately.
85
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997
- --------------------------------------------------------------------------------
G. FEDERAL INCOME TAXES
The Funds intend to continue to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of their taxable income to shareholders. Accordingly, no provision for federal
income taxes is required.
H. ORGANIZATIONAL COSTS
Costs incurred in organizing the Funds have been capitalized and are being
amortized on a straight-line basis over a 60 month period.
I. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
The Funds record dividends and distributions to shareholders on the ex-dividend
date. Distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. Accordingly,
periodic reclassifications are made within the Funds' capital accounts to
reflect income and gains available for distributionunder income tax regulations.
The Funds make distributions at least annually. The Treasury Securities Cash and
Government Securities Savings Funds accrue dividends, including short-term gains
or losses, on a daily basis with payment monthly. Tax Free and Near-Term Tax
Free pay monthly dividends. All American Equity and Income pay quarterly
dividends. Dividends and distributions payable at period end were processed for
reinvestment on the following business day.
J. EXPENSES
Each Fund bears expenses incurred specifically on its behalf plus an allocation
of its share of Trust level expenses. Short-term trading fees collected from
temporary investors in the Funds are applied as a reduction of expenses to the
extent of such related cost; any excess is credited as paid-in capital. Expense
offset arrangements have been made with the Funds' custodian so the custodian
fees are paid indirectly by credits earned on the Funds' cash balances. Such
deposit arrangements are an alter native to overnight investments.
K. USE OF ESTIMATES IN FINANCIAL STATEMENT PREPARATION
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
86
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997
- --------------------------------------------------------------------------------
NOTE 2: RELATED PARTY TRANSACTIONS
U.S. Global Investors, Inc. (the "Manager"), under an investment advisory
agreement with the Trust in effect through October 31, 1998, furnishes
management and investment advisory services and, subject to the supervision of
the Trustees, directs the inv estments of each Fund according to its investment
objectives, policies and limitations. The Manager also furnishes all necessary
office facilities, business equipment and personnel for administering the
affairs of the Trust. Frank E. Holmes, a trustee of the Funds, is the
controlling owner of the Manager.
For the services of the Manager, each Fund pays a management fee based upon its
net assets. Fees are accrued daily and paid monthly. The contractual management
fee for each Fund is:
-------------------------------- ----------------------------------
ANNUAL PERCENTAGE OF
FUND AVERAGE DAILY NET ASSETS
-------------------------------- ----------------------------------
Gold Shares, All American .75% of the first $250,000,000 and
Equity, Income, Tax Free and .50% of the excess
Real Estate
Treasury Securities Cash and .50% of the first $250,000,000 and
Government Securities Savings .375% of the excess
World Gold and Global Resources 1% of the first $250,000,000 and
.50% of the excess
Near-Term Tax Free .50%
China Region Opportunity 1.25%
The Manager has voluntarily guaranteed to reimburse specific Funds so that their
total operating expenses will not exceed certain annual percentages of average
net assets. The expenses for the year ended June 30, 1998, will be voluntarily
limited as fo llows: All American Equity at 1.00%, Tax Free and Near-Term Tax
Free at .70% and Government Securities Savings at .40%.
United Shareholder Services, Inc. ("USSI"), a wholly-owned subsidiary of the
Manager, is transfer agent for the Funds. Each Fund pays an annual fee based on
number of shareholder accounts for transfer agency services. Certain account
fees are paid directly by shareholders to the transfer agent, which, in turn,
reduces its charge to the Funds. For maintaining the books and records of the
Funds and calculating the daily net asset values, USSI is paid a fee based on
Fund net assets subject to a minimum fee. For the period ended December 31,
1997, USSI was paid $353,796 for performing such accounting duties. Effective,
November 1, 1997, the Funds changed to Brown Brothers Harriman & Co. as the new
custodian, fund accounting and administration service agent with a fee structure
based on average net assets. Additionally, the Manager is reimbursed at cost for
in-house legal services pertaining to each fund.
87
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997
- --------------------------------------------------------------------------------
During the period ended December 31, 1997, A & B Mailers, Inc., a wholly-owned
subsidiary of the Manager, was paid $73,866 for mailing services provided to the
Funds.
The five independent Trustees receive $24,000 annually as compensation for
serving on the Board, plus $2,000 per meeting. The Chairman and members of
special committees receive additional compensation ranging from $1,500 to
$14,000.
NOTE 3: INVESTMENT ACTIVITY
Purchases and sales of long-term securities for the period ended December 31,
1997 are summarized as follows:
---------------------------------------------------------------------
FUND PURCHASES SALES
---------------------------------------------------------------------
Near-Term Tax Free $ 3,089,599 $ 1,795,695
Tax Free 7,006,190 4,431,099
Income 453,750 383,956
All American Equity 2,690,759 1,474,524
Real Estate 1,026,310 1,409,520
China Region Opportunity 4,016,236 1,872,838
Global Resources 26,024,889 23,025,355
World Gold 15,486,462 30,012,966
Gold Shares 90,614,606 135,002,889
Treasury Securities Cash and Government Securities Savings held only short-term
investments.
Investments in foreign issuers as a percent of total investments at December 31,
1997 were: 2% of Real Estate, 80% of China Region Opportunity, 67% of Global
Resources, 54% of World Gold and 29% of Gold Shares.
88
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997
- --------------------------------------------------------------------------------
The following table presents the income tax basis of the securities owned at
December 31, 1997 and the tax basis components of net unrealized appreciation or
depreciation:
- --------------------------------------------------------------------------------
GROSS GROSS NET UNREALIZED
AGGREGATE UNREALIZED UNREALIZED APPRECIATION
FUND COST APPRECIATION DEPRECIATION (DEPRECIATION)
- --------------------------------------------------------------------------------
Treasury Securities Cash $ 179,630,352 $ 17,417 $ (19,188) $ (1,771)
Govt Securities Svngs 720,979,463 91,225 (226,243) (135,018)
Near-Term Tax Free 7,456,420 140,486 (465) 140,021
Tax Free 20,495,263 819,144 -0- 819,144
Income 8,602,087 2,229,438 (102,970) 2,126,468
All American Equity 17,686,043 10,591,350 (425,117) 10,166,233
Real Estate 13,296,619 3,442,063 (62,814) 3,379,249
China Region Opportunity 32,925,789 2,808,730 (9,959,282) (7,150,552)
Global Resources 28,374,360 5,132,515 (8,176,711) (3,044,196)
World Gold 130,683,720 32,123,242 (47,875,544) (15,752,302)
Gold Shares 65,759,219 836,979 (32,223,651) (31,386,672)
Net realized capital loss carryforwards, for federal income tax purposes, may be
used to offset current or future capital gains until expiration. The loss
carryforwards and related expiration dates for each Fund, as of June, 30 1997,
are as follows:
-------------------------------------------------------------------
Loss Expiration
Fund Carryforwards Dates
-------------------------------------------------------------------
Government Securities Savings $ 1,772,657 1999-2005
Near-Term Tax Free 230,120 2003-2004
Tax Free 184,605 2003-2005
China Region Opportunity 4,563,918 2003-2005
World Gold 38,477,726 1999-2001
Gold Shares 119,418,200 1998-2005
Gold Shares had post-October 31, 1996 capital losses of $37,316,583 which, in
accordance with tax rules, are deemed to have occurred on July 1, 1997.
89
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997
- --------------------------------------------------------------------------------
NOTE 4: RISKS OF CONCENTRATIONS
Gold Shares has significant investments in South African issuers. The unstable
political and social condition in South Africa may have disruptive effects on
the market prices of investments held by the Fund.
China Region Opportunity may be exposed to risks not typically associated with
investments in the United States, due to investments in foreign issuers in the
region. These investments present risks resulting from disruptive political or
economic conditions and the possible imposition of adverse governmental laws or
currency exchange restrictions affecting the area.
90
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS U.S. TREASURY SECURITIES CASH FUND
- --------------------------------------------------------------------------------
For a capital share outstanding during the six months ended December 31, 1997
and each year ended June 30,
<TABLE>
<CAPTION>
12/97 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
....................................................................................................................................
Investment Activities
Net investment income .02 .04 .04 .04 .02 .02
Net realized and unrealized gain (loss) -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Total from investment activities .02 .04 .04 .04 .02 .02
-------- -------- -------- -------- -------- --------
Distributions
From net investment income (.02) (.04) (.04) (.04) (.02) (.02)
From net realized gains -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Total distributions (.02) (.04) (.04) (.04) (.02) (.02)
....................................................................................................................................
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
....................................................................................................................................
TOTAL RETURN (excluding account fees) 2.32% 4.35% 4.54% 4.43% 2.38% 2.46%
Ratios to Average Net Assets (a):
Net investment income 4.49% 4.22% 4.42% 4.32% 2.38% 2.41%
Total expenses .97% 1.04% 1.03% .97% .96% 1.14%
Expenses reimbursed or offset -- -- -- -- (.03)% (.15)%
Net expenses .97% 1.04% 1.03% .97% .93% .99%
Net assets, end of period
(in thousands) $182,369 $231,882 $188,844 $190,373 $164,708 $142,888
</TABLE>
(a) Ratios are annualized for periods of less than one year. Expenses
reimbursed or offset reflect reductions to total expenses, as discussed in
the notes to the financial statements. These amounts would decrease the net
investment income ratio had such reductions not occurred.
See accompanying notes to financial statements.
91
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS U.S. GOVERNMENT SECURITIES SAVINGS FUND
- --------------------------------------------------------------------------------
For a capital share outstanding during the six months ended December 31, 1997
and each year ended June 30,
<TABLE>
<CAPTION>
12/97 1997 1996 1995 1994 1993
....................................................................................................................................
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
....................................................................................................................................
Investment Activities
Net investment income .03 .05 .05 .05 .03 .04
Net realized and unrealized gain (loss) -- -- -- (.01) -- --
-------- -------- -------- -------- -------- --------
Total from investment activities .03 .05 .05 .04 .03 .04
-------- -------- -------- -------- -------- --------
Distributions
From net investment income (.03) (.05) (.05) (.05) (.03) (.04)
From net realized gains -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Total distributions (.03) (.05) (.05) (.05) (.03) (.04)
Capital contribution by manager -- -- -- .01 -- --
....................................................................................................................................
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
....................................................................................................................................
TOTAL RETURN (excluding account fees) 2.70% 5.27% 5.34% 5.09%(b) 3.34% 3.79%
Ratios to Average Net Assets (a):
Net investment income 5.22% 5.13% 5.28% 5.03% 3.34% 3.61%
Total expenses .67% .70% .71% .68% .71% .81%
Expenses reimbursed or offset (.37)% (.41)% (.45)% (.45)% (.55)% (.62)%
Net expenses .30% .29% .26% .23% .16% .19%
Net assets, end of period
(in thousands) $732,794 $691,769 $588,409 $529,372 $610,229 $445,418
</TABLE>
(a) Ratios are annualized for periods of less than one year. Expenses
reimbursed or offset reflect reductions to total expenses, as discussed in
the notes to the financial statements. Such amounts would decrease the net
investment income ratio had su ch reductions not occurred.
(b) Total return includes the effect of a voluntary capital contribution by the
Manager; otherwise the return would have been 4.19%.
See accompanying notes to financial statements.
92
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS NEAR-TERM TAX FREE FUND
- --------------------------------------------------------------------------------
For a capital share outstanding during the six months ended December 31, 1997
and each year ended June 30,
<TABLE>
<CAPTION>
12/97 1997 1996 1995 1994 1993
....................................................................................................................................
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.49 $ 10.38 $ 10.47 $ 10.39 $ 10.74 $ 10.42
....................................................................................................................................
Investment Activities
Net investment income .22 .48 .47 .45 .43 .61
Net realized and unrealized gain (loss) .19 .12 (.09) .06 (.21) .31
------ ------ ------ ------ ------ ------
Total from investment activities .41 .60 .38 .51 .22 .92
------ ------ ------ ------ ------ ------
Distributions
From net investment income (.22) (.49) (.47) (.43) (.44) (.59)
In excess of net investment income -- -- -- -- (.07) --
From net realized gains -- -- -- -- -- (.01)
In excess of net realized gains -- -- -- -- (.06) --
------ ------ ------ ------ ------ ------
Total distributions (.22) (.49) (.47) (.43) (.57) (.60)
....................................................................................................................................
NET ASSET VALUE, END OF PERIOD $ 10.68 $ 10.49 $ 10.38 $ 10.47 $ 10.39 $ 10.74
....................................................................................................................................
TOTAL RETURN (excluding account fees) 3.94% 5.85% 3.68% 5.02% 2.03% 9.10%
Ratios to Average Net Assets (a):
Net investment income 4.11% 4.67% 4.41% 4.25% 4.34% 5.73%
Total expenses 1.63% 1.92% 1.75% 1.62% 1.80% 2.55%
Expenses reimbursed or offset (.93)% (1.52)% (1.23)% (1.42)% (1.80)% (2.55)%
Net expenses .70% .40% .52% .20% -- --
Portfolio turnover rate 47% 103% 83% 53% 69% 140%
Net assets, end of period
(in thousands) $7,704 $7,360 $6,545 $7,128 $9,190 $1,775
</TABLE>
(a) Ratios are annualized for periods of less than one year. Expenses
reimbursed or offset reflect reductions to total expenses, as discussed in
the notes to the financial statements. Such amounts would decrease the net
investment income ration had su ch reductions not occurred.
See accompanying notes to financial statements.
93
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS TAX FREE FUND
- --------------------------------------------------------------------------------
For a capital share outstanding during the six months ended December 31, 1997
and each year ended June 30,
<TABLE>
<CAPTION>
12/97 1997 1996 1995 1994 1993
....................................................................................................................................
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.89 $ 11.58 $ 11.55 $ 11.40 $ 12.16 $ 11.69
....................................................................................................................................
Investment Activities
Net investment income .29 .59 .59 .64 .67 .66
Net realized and unrealized gain (loss) .35 .31 .01 .18 (56) .47
------- ------- ------- ------- ------- -------
Total from investment activities .64 .90 .60 .82 .11 1.13
------- ------- ------- ------- ------- -------
Distributions
From net investment income (.29) (.59) (.57) (.64) (.68) (.63)
In excess of net investment income -- -- -- (.03) (.06) --
From net realized gains -- -- -- -- (.06) (.03)
In excess of net realized gains -- -- -- -- (.07) --
------- ------- ------- ------- ------- -------
Total distributions (.29) (.59) (.57) (.67) (.87) (.66)
....................................................................................................................................
NET ASSET VALUE, END OF PERIOD $ 12.24 $ 11.89 $ 11.58 $ 11.55 $ 11.40 $ 12.16
....................................................................................................................................
TOTAL RETURN (excluding account fees) 5.39% 7.93% 5.25% 7.51% .75% 9.97%
Ratios to Average Net Assets (a):
Net investment income 4.73% 5.00% 5.06% 5.62% 5.68% 5.48%
Total expenses 1.42% 1.46% 1.44% 1.49% 1.46% 1.53%
Expenses reimbursed or offset (.72)% (1.06)% (1.08)% (1.27)% (1.46)% (1.21)%
Net expenses .70% .40% .36% .22% .32%
Portfolio turnover rate 46% 87% 69% 22% 51% 94%
Net assets, end of period
(in thousands) $20,494 $18,327 $19,949 $18,613 $18,656 $17,192
</TABLE>
(a) Ratios are annualized for periods of less than one year. Expenses
reimbursed or offset reflect reductions to total expenses, as discussed in
the notes to the financial statements. Such amounts would decrease the net
investment income ration had such reductions not occurred.
See accompanying notes to financial statements.
94
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS INCOME FUND
- --------------------------------------------------------------------------------
For a capital share outstanding during the six months ended December 31, 1997
and each year ended June 30,
<TABLE>
<CAPTION>
12/97 1997 1996 1995 1994 1993
....................................................................................................................................
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.49 $ 14.94 $ 13.35 $ 12.57 $ 14.06 $ 12.65
....................................................................................................................................
Investment Activities
Net investment income .11 .31 .35 .35 .31 .30
Net realized and unrealized gain (loss) 1.66 1.77 1.84 .79 (1.06) 2.19
------ ------ ------ ------- ------- -------
Total from investment activities 1.77 2.08 2.19 1.14 (.75) 2.49
------ ------ ------ ------- ------- -------
Distributions
From net investment income (.11) (.27) (.35) (.34) (.31) (.27)
In excess of net investment activities -- -- -- -- (.03) --
From net realized gains (2.15) (2.26) (.25) (.02) (.01) (.79)
In excess of net realized gains -- -- -- -- (.39) (.02)
------ ------ ------ ------- ------- -------
Total distributions (2.26) (2.53) (.60) (.36) (.74) (1.08)
....................................................................................................................................
NET ASSET VALUE, END OF PERIOD $ 14.00 $ 14.49 $ 14.94 $ 13.35 $ 12.57 $ 14.06
....................................................................................................................................
TOTAL RETURN (excluding account fees) 12.24% 15.58% 16.60% 9.31% (5.83)% 20.68%
Ratios to Average Net Assets (a):
Net investment income 1.86% 2.18% 2.45% 2.59% 2.27% 2.34%
Total expenses 2.09% 2.20% 2.10% 2.01% 1.79% 1.88%
Expenses reimbursed or offset (.01)% (.01)% (.02)% (.03)% (.05)% (.05)%
Net expenses 2.08% 2.19% 2.08% 1.98% 1.74% 1.83%
Average commission rate paid $ .0714 $ .0945 $ .0941 n/a n/a n/a
Portfolio turnover rate 10% 88% 51% 7% 7% 44%
Net assets, end of period
(in thousands) $9,294 $9,615 $9,698 $10,230 $11,865 $11,009
</TABLE>
(a) Ratios are annualized for periods of less than one year. Expenses
reimbursed or offset reflect reductions to total expenses, as discussed in
the notes to the financial statements. Such amounts would decrease the net
investment income ration had su ch reductions not occurred.
See accompanying notes to financial statements.
95
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS ALL AMERICAN EQUITY FUND
- --------------------------------------------------------------------------------
For a capital share outstanding during the six months ended December 31, 1997
and each year ended June 30,
<TABLE>
<CAPTION>
12/97 1997 1996 1995 1994 1993
....................................................................................................................................
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $31.34 $24.55 $20.08 $19.52 $20.60 $18.79
....................................................................................................................................
Investment Activities
Net investment income .19 .38 .41 .44 .44 .36
Net realized and unrealized gain (loss) 2.24 7.64 4.44 2.68 (.75) 1.91
------- ------- ------- ------- ------- -------
Total from investment activities 2.43 8.02 4.85 3.12 (.31) 2.27
------- ------- ------- ------- ------- -------
Distributions
From net investment income (.09) (.43) (.38) (.39) (.44) (.37)
In excess of net investment activities -- -- -- -- (.02) (.09)
From net realized gains (.55) (.80) -- -- (.31) --
In excess of net realized gains -- -- -- (2.17) -- --
------- ------- ------- ------- ------- -------
Total distributions (.64) (1.23) (.38) (2.56) (.77) (.46)
....................................................................................................................................
NET ASSET VALUE, END OF PERIOD $33.13 $31.34 $24.55 $20.08 $19.52 $20.60
....................................................................................................................................
TOTAL RETURN (excluding account fees) 7.75% 33.68% 24.31% 17.98% (1.67)% (12.15)%
Ratios to Average Net Assets (a):
Net investment income 1.16% 1.51% 1.84% 2.33% 2.11% 1.86%
Total expenses 1.56% 1.81% 1.90% 2.17% 2.08% 1.75%
Expenses reimbursed or offset (.56)% (1.14)% (1.22)% (1.47)% (1.47)% (.72)%
Net expenses 1.00% .67% .68% .70% .61% 1.03%
Average commission rate paid $.0738 $.1000 $.1000 n/a n/a n/a
Portfolio turnover rate 15% 7% 16% 97% 117% 12%
Net assets, end of period
(in thousands) $27,384 $25,478 $15,220 $11,931 $10,227 $12,331
</TABLE>
(a) Ratios are annualized for periods of less than one year. Expenses
reimbursed or offset reflect reductions to total expenses, as discussed in
the notes to the financial statements. Such amounts would decrease the net
investment income ration had such reductions not occurred.
See accompanying notes to financial statements.
96
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS REAL ESTATE FUND
- --------------------------------------------------------------------------------
For a capital share outstanding during the six months ended December 31, 1997
and each year ended June 30,
<TABLE>
<CAPTION>
12/97 1997 1996 1995 1994 1993
....................................................................................................................................
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $14.22 $10.97 $9.80 $9.86 $10.96 $10.17
....................................................................................................................................
Investment Activities
Net investment income .24 .40 .42 .23 .22 .17
Net realized and unrealized gain (loss) 1.63 3.16 1.27 (.13) (1.05) .79
------- ------- ------ ------ ------- -------
Total from investment activities 1.87 3.55 1.69 .10 (.83) .96
------- ------- ------ ------ ------- -------
Distributions
From net investment income (.28) (.30) (.39) (.16) (.22) (.17)
In excess of net investment activities -- -- -- -- (.02) --
Tax return of capital -- -- (.13) -- (.03) --
From net realized gains (.27) -- -- -- -- --
------- ------- ------ ------ ------- -------
Total distributions (.55) (.30) (.52) (.16) (.27) (.17)
....................................................................................................................................
NET ASSET VALUE, END OF PERIOD $15.54 $14.22 $10.97 $9.80 $9.86 $10.96
....................................................................................................................................
TOTAL RETURN (excluding account fees) 13.13% 32.44% 17.34% 1.09% (7.70)% 9.45%
Ratios to Average Net Assets (a):
Net investment income 3.44% 3.19% 3.63% 2.22% 1.96% 1.55%
Total expenses 1.83% 1.82% 2.27% 1.95% 1.62% 1.42%
Expenses reimbursed or offset (.03)% (.02)% (.01)% (.03)% (.03)% (.02)%
Net expenses 1.80% 1.80% 2.26% 1.92% 1.59% 1.40%
Average commission rate paid $.0568 $.0830 $.0925 n/a n/a n/a
Portfolio turnover rate 16% 118% 108% 48% 145% 187%
Net assets, end of period
(in thousands) $16,297 $13,897 $8,220 $9,169 $14,597 $19,780
</TABLE>
(a) Ratios are annualized for periods of less than one year. Expenses
reimbursed or offset reflect reductions to total expenses, as discussed in
the notes to the financial statements. Such amounts would decrease the net
investment income ration had such reductions not occurred.
See accompanying notes to financial statements.
97
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS CHINA REGION OPPORTUNITY FUND
- --------------------------------------------------------------------------------
For a capital share outstanding during the six months ended December 31, 1997
and each year ended June 30,
<TABLE>
<CAPTION>
12/97 1997 1996 1995 1994* 1994**
....................................................................................................................................
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.60 $ 6.43 $ 6.67 $ 7.75 $ 10.00 $ 9.92
....................................................................................................................................
Investment Activities
Net investment income -- .05 .08 .10 .04 .04
Net realized and unrealized gain (loss) (2.75) 2.15 (.22) (1.09) (2.25) (2.17)
------- ------- ------- ------- ------ ------
Total from investment activities (2.75) 2.20 (.14) (.99) (2.21) (2.13)
------- ------- ------- ------- ------ ------
Distributions
From net investment income (.05) (.03) (.08) (.09) (.04) (.04)
In excess of net investment activities -- -- (.02) -- -- --
From net realized gains -- -- -- -- -- --
------- ------- ------- ------- ------ ------
Total distributions (.05) (.03) (.10) (.09) (.04) (.04)
....................................................................................................................................
NET ASSET VALUE, END OF PERIOD $ 5.80 $ 8.60 $ 6.43 $ 6.67 $ 7.75 $ 7.75
....................................................................................................................................
TOTAL RETURN (excluding account fees) (32.01)% 34.38% (2.07)% (12.79)% (22.11)% (21.48)%
Ratios to Average Net Assets (a):
Net investment income (.11)% .87% 1.24% 1.53% 1.51% 1.33%
Total expenses 2.49% 2.54% 2.60% 2.51% 3.10% 3.26%
Expenses reimbursed or offset (.32)% (.45)% (.56)% (1.48)% (1.38)%
Net expenses 2.49% 2.22% 2.15% 1.95% 1.62% 1.88%
Average commission rate paid $ .0046 $ .0034 $ .0028 n/a n/a n/a
Portfolio turnover rate 51% 24% 37% 54% 13% 13%
Net assets, end of period
(in thousands) $25,620 $42,099 $20,967 $19,022 $7,655 $7,655
</TABLE>
(a) Ratios are annualized for periods of less than one year. Expenses
reimbursed or offset reflect reductions to total expenses, as discussed in
the notes to the financial statements. Such amounts would decrease the net
investment income ration had such reductions not occurred.
* For the period January 10, 1994, commencement of operations, through June
30, 1994.
** For the period February 10, 1994, effective date of registration and public
offering, through June 30, 1994.
See accompanying notes to financial statements.
98
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS GLOBAL RESOURCES FUND
- --------------------------------------------------------------------------------
For a capital share outstanding during the six months ended December 31, 1997
and each year ended June 30,
<TABLE>
<CAPTION>
12/97 1997 1996 1995 1994 1993
....................................................................................................................................
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $7.33 $6.98 $5.76 $5.74 $6.10 $5.78
....................................................................................................................................
Investment Activities
Net investment income (.07) (.05) (.01) (.03) (.02) .01
Net realized and unrealized gain (loss) (.37) 1.34 1.31 .36 (.18) .35
------- ------- ------- ------- ------- -------
Total from investment activities (.44) 1.29 1.30 .33 (.20) .36
------- ------- ------- ------- ------- -------
Distributions
From net investment income -- (.04) -- -- -- (.01)
In excess of net investment activities -- -- (.01) -- (.01) (.03)
From net realized gains (.91) (.90) (.07) -- (.15) --
In excess of net realized gains -- -- -- (.31) -- --
------- ------- ------- ------- ------- -------
Total distributions (.91) (.94) (.08) (.31) (.16) (.04)
....................................................................................................................................
NET ASSET VALUE, END OF PERIOD $5.98 $7.33 $6.98 $5.76 $5.74 $6.10
....................................................................................................................................
TOTAL RETURN (excluding account fees) (6.07)% 18.96% 22.80% 5.94% (3.73)% 6.46%
Ratios to Average Net Assets (a):
Net investment income (1.60)% (.76)% (.13)% (.60)% (.34)% .17%
Total expenses 2.19% 2.34% 2.58% 2.51% 2.44% 2.48%
Expenses reimbursed or offset (.06)% (.04)% (.01)% (.02)% (.01)% (.02)%
Net expenses 2.13% 2.30% 2.57% 2.49% 2.43% 2.46%
Average commission rate paid $.0165 $.0179 $.0306 n/a n/a n/a
Portfolio turnover rate 163% 52% 117% 50% 58% 120%
Net assets, end of period (in thousands) $24,967 $29,983 $24,534 $21,452 $21,620 $23,939
</TABLE>
(a) Ratios are annualized for periods of less than one year. Expenses
reimbursed or offset reflect reductions to total expenses, as discussed in
the notes to the financial statements. Such amounts would decrease the net
investment income ration had such reductions not occurred.
See accompanying notes to financial statements.
99
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS WORLD GOLD FUND
- --------------------------------------------------------------------------------
For a capital share outstanding during the six months ended December 31, 1997
and each year ended June 30,
<TABLE>
<CAPTION>
12/97 1997 1996 1995 1994 1993
....................................................................................................................................
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.95 $ 21.12 $ 15.81 $ 15.63 $ 14.59 $ 9.51
....................................................................................................................................
Investment Activities
Net investment income .08 (.12) (.08) (.12) (.09) (.12)
Net realized and unrealized gain (loss) (4.58) (3.94) 5.39 .33 1.13 5.20
-------- -------- -------- -------- -------- --------
Total from investment activities (4.66) (4.06) 5.31 .21 1.04 5.08
-------- -------- -------- -------- -------- --------
Distributions
From net investment income (.14) (1.11) -- -- --
In excess of net investment income -- -- -- (.03) -- --
From net realized gains -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Total distributions (.14) (1.11) -- (.03) -- --
....................................................................................................................................
NET ASSET VALUE, END OF PERIOD $ 11.15 $ 15.95 $ 21.12 $ 15.81 $ 15.63 $ 14.59
....................................................................................................................................
TOTAL RETURN (excluding account fees) (29.22)% (20.10)% 33.59% 1.36% 7.13% 53.58%
Ratios to Average Net Assets (a):
Net investment income (.91)% (.60)% (.40)% (.66)% (.66)% (1.15)%
Total expenses 1.79% 1.54% 1.53% 1.58% 1.57% 2.06%
Expenses reimbursed or offset (.01)% (.02)% (.02)% (.03)% (.04)% (.06)%
Net expenses 1.78% 1.52% 1.51% 1.55% 1.53% 2.00%
Average commission rate paid $ .0121 $ .0220 $ .0202 n/a n/a n/a
Portfolio turnover rate 17% 40% 26% 28% 20% 26%
Net assets, end of period (in thousands) $131,311 $187,466 $248,781 $181,473 $202,819 $109,805
</TABLE>
(a) Ratios are annualized for periods of less than one year. Expenses
reimbursed or offset reflect reductions to total expenses, as discussed in
the notes to the financial statements. Such amounts would decrease the net
investment income ration had such reductions not occurred.
See accompanying notes to financial statements.
100
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS GOLD SHARES FUND
- --------------------------------------------------------------------------------
For a capital share outstanding during the six months ended December 31, 1997
and each year ended June 30,
<TABLE>
<CAPTION>
12/97 1997 1996 1995 1994 1993
....................................................................................................................................
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $.94 $1.84 $2.14 $2.48 $2.49 $2.21
....................................................................................................................................
Investment Activities
Net investment income .02 .04 .05 .06 .07 .04
Net realized and unrealized gain (loss) (.38) (.89) (.30) (.33) (.02) .29
------- ------- -------- -------- -------- --------
Total from investment activities (.36) (.85) (.25) (.27) .05 .33
------- ------- -------- -------- -------- --------
Distributions
From net investment income (.01) (.05) (.05) (.06) (.06) (.04)
In excess of net investment activities (.01) (.01)
From net realized gains
------- ------- -------- -------- -------- --------
Total distributions (.01) (.05) (.05) (.07) (.06) (.05)
....................................................................................................................................
NET ASSET VALUE, END OF PERIOD $.57 $.94 $1.84 $2.14 $2.48 $2.49
....................................................................................................................................
TOTAL RETURN (excluding account fees) (38.09)% (46.49)% (11.73)% (11.21)% 1.85% 16.70%
Ratios to Average Net Assets (a):
Net investment income 1.67% 2.68% 1.81% 2.47% 2.61% 2.58%
Total expenses 2.39% 1.84% 1.58% 1.47% 1.52% 1.95%
Expenses reimbursed or offset (.69)% (.04)% (.04)% (.05)% (.06)% (.07)%
Net expenses 1.70% 1.80% 1.54% 1.42% 1.46% 1.88%
Average commission rate paid $.0231 $.0340 $.0523 n/a n/a n/a
Portfolio turnover rate 77% 44% 24% 33% 29% 20%
Net assets, end of period (in thousands) $66,121 $79,598 $153,839 $211,171 $263,827 $299,808
</TABLE>
(a) Ratios are annualized for periods of less than one year. Expenses
reimbursed or offset reflect reductions to total expenses, as discussed in
the notes to the financial statements. Such amounts would decrease the net
investment income ration had such reductions not occurred.
See accompanying notes to financial statements.
101
<PAGE>
NOTES:
[BLANK PAGE FOR SHAREHOLDER TO USE FOR NOTES]
102
<PAGE>
BACK COVER
[GRAPHIC: U.S.GLOBAL INVESTORS COMPANY LOGO IN BOTTOM LEFT CORNER]
P.O. Box 781234
San Antonio, Texas 78278-1234
1-800-873-8637
www.usfunds.com
